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A Guess At Q1 2024 Earnings, For Merck — Next Week: Should Be Strong…

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This event next week. . . is unlikely to make a big wave in Merck’s NYSE stock price, because the dynamics of pembrolizumab’s ever rising revenue penetration are pretty well understood, on Wall Street. So — in the main, the open variables reside in the op. expense / M&A / cap ex. lines (all controllable by the executive team, quarter to quarter). And even as to those smaller ones that are not, Merck’s executives have spent about 75 years fine-tuning quarter to quarter levers, to pull should a wrinkle arise.

So, again — next Thursday morning is barely likely to be news, at all. And you may bet it will not be a train-wreck (though THAT would be… news).

Here’s at least one analyst’s view — and I’d expect Rahway to meet, and perhaps slightly exceed… these figures:

…Merck & Co., Inc. will announce its Q1 2024 earnings next Thursday, April 25. Analysts’ consensus opinion is that earnings per share will be about $1.99 on a normalized basis, or $1.87 on a GAAP basis, on revenues of ~$15.2 billion….

Big pharma is generally regarded as a strong sector for investment, with most companies driving wide profit margins — my calculated average net profit margin of the world’s 15 biggest pharma companies is 19% — paying handsome dividends — my calculated average dividend yield is ~3.1% — and delivering solid, S&P-beating share price / trading returns….

Onward — to a wonderful Spring weekend! Be excellent to one another….

नमस्ते

[U: He Has Died.] Truly Sad. Nuthin’ More To Say About It.

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Who knows… how a man’s mind gets… broken?

We will likely never know where he lost touch with reality.

But it is not a bridge too far — to suggest many of Tangerine’s acolytes… to varying degrees — have also lost touch with objective, rational, reality.

Still this is immensely sad. I hope he pulls through, but it seems unlikely at this point.

Update: by 10:30 pm EDT on the same day, he had succumbed to his self-inflicted burn injuries. Hard to understand.

Onward.

A Slow Motion… Heart-Break? Seems Likely — Of Pluto, And The Surprising Findings From Nine Years Ago…

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I’ll have more later, but I wanted to get this one right out (in case union labor law isn’t doing it for you, this noon-time!).

There’s a very elegant, graceful explanation for how Pluto came to show a vast heart shape — on its lower surface (as imaged in New Horizon’s flyby of 2015). Get this:

…Now, researchers believe they’ve uncovered the origin of this cosmic Valentine. The heart, they report today (April 15) in the journal Nature Astronomy, was formed in a slow-motion, glancing collision with an icy rock wider than [Tennessee] is long.

The researchers determined this scenario by using computer models to simulate the impacts on Pluto’s surface and the resulting formations. Pluto’s heart, scientifically known as Tombaugh Regio, gets its light coloration from nitrogen ice. Impacts between icy bodies in the far reaches of the solar system aren’t like those closer to the sun, said study co-author Erik Asphaug, a professor at the University of Arizona’s Lunar and Planetary Laboratory….

Led by Martin Jutzi, a senior researcher at the University of Bern in Switzerland, the team used a simulation method called smoothed particle hydrodynamics to test various angles of collision and sizes of impactors to learn which dynamics would lead to the formation of Sputnik Planitia, the western portion of Pluto’s heart. This roughly 800-square-mile (2,000 square kilometers) region sits about 2.5 miles (4 km) lower than its surroundings….

The icy rock that hit Pluto was probably around 454 miles (730 km) in diameter, the study authors said. Because of Pluto’s icy core, the impact did not melt and liquefy portions of the planet as might happen in an impact in warmer climes, allowing the impacting body to sink into the planet’s core.

Instead, the impactor likely flattened on Pluto’s surface. Even now, it may sit just under the smooth nitrogen ice that covers Sputnik Planitia….

We covered it, back then — mostly whimsically — but now we know the planetary science origins of such a strikingly beautiful feature: A long-lived, subtle heart-ache — from a slow motion collision that long ago went… awry. Poetic, indeed.

नमस्ते

Labor Matters, On A Friday: Not Since The Late-1940s, Has A Union Won Any Industrial Plant Election, South Of The Mason-Dixon Line…

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But it is very likely to happen tonight, around 11 pm EDT — in Chattanooga, Tennessee… the United Auto Workers will have voted to unionize the VW America plant there.

Since we have been following the resurgence of workers’ rights — and the new teeth accorded to NLRB decisions, for about five years here — largely at Amazon, but also at Starbucks and a few other shops… I thought it important to point to the larger narrative: for over three decades, larger employers have been increasingly unfair to their blue collar workforces. With almost no push back, in evidence.

Well… that time has now likely ended. The UAW may not be perfect, but it is certain that something was needed — to counter the highly unequal bargaining power, and bully-tactics, of the German carmaker, in the Volunteer State. Auto-makers (including Tesla, obviously) should take heed: the time of Draconian “workshop rules” (which, in Tesla’s case — nearly amount to patriarchal / thought policing) is (once again) coming to an end. Here’s the latest, from Reuters:

…The United Auto Workers is counting on scoring a seismic victory at Volkswagen’s Tennessee plant as unionization votes are tallied on Friday – one that opens up the anti-union U.S. South to organized labor.

A win would make the Chattanooga factory the first auto plant in the South to unionize via election since the 1940s and the first foreign-owned auto plant in the South to do so.

[The UAW is presently attempting] to unionize plants owned by more than a dozen automakers across the U.S., including Tesla….

Federal officials from the National Labor Relations Board on Friday evening will start the counting of ballots after three days of voting ends, with results expected around 11 p.m. Eastern Time (0300 GMT).

“Everybody else is watching,” said Isaac Meadows, a worker at the VW plant, who said he voted in support of the union. “This is going to change the labor landscape across the country….”

And real wage levels — ones upon which a normal American family might actually afford health care, and a modest home… shall return, in the process. Or so I am hoping. Onward, into the sunshine!

नमस्ते

Getting Vaccines — On A “Millions Of Doses Scale”, Into Vials, Flawlessly… Is A Daunting Engineering Challenge: Gardasil® Manufacturing Contract Delays, For Gavi ’24

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After running into Gardasil® supply shortfalls in both 2018 and 2019, Merck made a large capital expense / expansion downstroke in its rural Elkton, Virginia facilities — to double manufacturing capacity. [We covered that, here, in real time.]

But now Merck may be (in part) a victim of its own marketing successes, in Europe, and the US and Japan — as even its overall expanded capacity — between Durham, West Point and Elkton is being sorely tested. More doses are being sold than expected, in high margin geographies.

And so, this morning, we read in the NYT that Rahway will be about 1.2 million doses short, on its 2024 delivery contract with the global non-profit alliance that immunizes young African girls against HPV, which after infection and remaining dormant for years in the human body, may — later in life — manifest itself as several forms of cancers.

So the jabs are critical — and approved for all girls at the age of 12. Being even a year late in getting it (if a girl is sexually active), may mean that we’ve missed the window. Once you’ve contracted the HPV virus, obviously, the vaccine is of no real use. So here’s to hoping Merck is able to resolve the “manual inspections” snag, and rapidly so. [The company doesn’t make any real profit on the Gavi contract — but makes very high profits on EU, UK and US dosings of the Gardasil vaccine.]

Here’s the bit from the NYT:

…Nearly 1.5 million teenage girls in some of the world’s poorest countries will miss the chance to be protected from cervical cancer because the drugmaker Merck has said it will not be able to deliver millions of promised doses of the HPV vaccine this year.

Merck has notified Gavi, the international organization that helps low- and middle-income countries deliver lifesaving immunizations, and UNICEF, which procures the vaccines, that it will deliver only 18.8 million of the 29.6 million doses it was contracted to deliver in 2024, Gavi said….

Patrick Ryan, a spokesman for Merck, said the company “experienced a manufacturing disruption” that required it to hold and reinspect many doses by hand. He declined to give further details about the cause of the delay….

Perhaps some of the “high margin” inventory in Europe might be temporarily diverted to the African continent, until the glitch is straightened out? Perhaps — as I suspect Merck has enough on hand to cover its higher profit geographical contract commitments. But I’m just a natural-born cynic, in that way. Onward — sorta’ gray morning here.

नमस्ते

I Couldn’t Make This Up, If I Tried: Update — Riot’s Jason Les Made “Tim Cook-esque” Money In 2023 — To Burn Tons Of Cash Flow, And Lose $50 Million…

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Last week, I mentioned that Merck’s Rob Davis made a little over $20 million last year — joining the top tier of multinational life-science / pharma CEOs — in the take-home pay stratosphere. There is a fair argument that most of the pharma CEOs at bottom right are worth what they are paid — I may not agree with it, precisely — but I understand the argument.

And there is a fair argument that Apple’s Tim Cook is worth the lil’ over $50 million he made for 2023. His company generates about $110 billion in free cash flow every year, is wildly profitable, sells the best tech on the planet — and sports a trillion dollar market cap.

Overnight, tiny Riot Platforms — a money burning Bitcoin miner in dusty West Texas — finally disclosed its CEO’s all in 2023 pay (see table, far lower right, on page 60 of the just filed SEC proxy). CEO Jason Les makes just a lil’ less than… Tim Cook?! And his board thought it “right” to pay him more than DOUBLE what the wildly profitable and much more complex pharma businesses, with global regulatory footprints — pay their literally life-saving CEOs?

I am sorry. There is simply no rational argument to support that. The shareholders of Riot ought to vote “no” — in their “say on pay” this proxy season. It is in the mail, now from Castle Rock, Colorado. Or it will be soon.

And do keep an eye on Riot’s NASDAQ-traded stock, which was over $25 late last year… at $7 something today, and likely $4 something after this weekend’s “Halvening”. How does such a five year con job… persist?!

As just one point of comparison, Caitlin Clark — perhaps the best overall women’s college player in a decade (and the best shooter ever seen, in the college ranks)… is set to make only about $72,000 a year as a WNBA rookie, in salary (she will make more, in endorsements, though) — while Victor Wembanyama, the men’s no. one pick last year in the NBA draft will make $12 million this year (and $55 million over four years — still below Jason Les’s ~$72 million in the last four years).

Whoa — onward, grinning just the same.

नमस्ते

Power Alley Trivia On Wednesday: An Auto-Generated Story — About Merck “Insiders” Selling Stock… Is Devoid Of Any Rational Analysis.

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From time to time, I run across “stories” — likely generated by automated bots, or AI, if one prefers that turn of phrase. As I’ve previously said, the silliest version of these is likely the class that adds up SEC Form 4s totals for over a year, and declares that “insider executives” have lost confidence in the subject company. Poppycock.

In most cases, the seller(s) turn out to be using shares to pay for their exercise of options, or to pay taxes (i.e., to acquire even MORE shares in Merck — increase their investment holdings — not reduce them). Geez.

These auto-bots purport to offer “analysis” of financially important trends. But in truth, they usually get it exactly… backwards. As here. The “story” simply obscures a… non-event, over the past year out of Rahway.

Here is the specific nonsense, of the morning — for the sake of a complete record, solely:

…Insiders sold Merck shares recently, but they didn’t buy any. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company.

In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Merck….

They “didn’t buy any, on the NYSE” is true, insofar as it goes. But it ignores that these “insiders” EARN shares, in restricted grants, and in options, vesting over time — from the company Treasury, directly — in return for their service to the company. In sum, day by day, their NET investment in the company’s fortunes, and future… increases.

Now you know. Onward.

नमस्ते

Hinderaker’s Omits… Much. Enough To Make It Misleading / False, In The Telling.

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Honestly, I’ve covered this ground a dozen times.

Hinderaker leaves out context; ignores subtleties… and most of all, feels Israel has never been in the wrong. Ever.

There is no reasoning with anyone who holds that view.

And I don’t care to discuss competing religious-like zealotry… when each zealot’s side… is at war.

With each other.

There is scant point in doing so — until both sides grow completely bone-weary of the dying – and the killing.

So sure John — call for “eradication”. You are a frail old man, safe in your overstuffed leather arm chair, tonight in bucolic ex-urban Minnesota.

You sip your Manhattan and pontificate, fecklessly… because no one you love — let alone are related to, by blood is in harm’s way.

It’s easy to be an insufferable blowhard — — when you’re like old John. A world away from it all.

Out.

Down, From $78, Two Weeks Ago — To Now ~$23.20 On NASDAQ, Tangerine’s “Truth” Stock Is A Dead Cat, Dropped From A Skyscraper…

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The stock is setting up very nicely, if one wants to allege that Devin Nunes’ CEO puffery — and Tangerine’s own material misstatements are actionable as federal securities fraud, that is. But to have a claim, one must buy at least a few shares. That is the bridge too far, for yours truly. This is the same scam he’s always run — sticking his investors with a property that is (after all bills are paid) worth next to nothing. Charming.

But the reason I write, is NOT to note that Devin Nunes now claims the “DJT symbol” will start streaming live hard right TV over that rickety social network (news that caused an added 8% stock decline just this morning, since that is vast new capital expense needed)… but to note that Trump himself is complaining that he will likely miss his youngest son’s graduation, since he is on trial for felonies in New York State.

See at right — highlighted portion (from his own phone, overnight). He fails to mention that the trial has been delayed repeatedly by his own specious tactics, with his counsel — claiming all manner of nonsense about not being subject to ordinary rules of criminal procedure. This caused the trial date to be delayed until… now. So he chose this course. He must deal with its consequences.

He’s been allowed to fully explore his nutty legal theories, but once an indictment for multiple felonies has been handed down, at some point the people of the State of New York ALSO have a right to see… justice done. If he is acquitted — fine. But if he isn’t… he is like all other criminal defendants, now. The State has a strong interest in a speedy trial — and incarceration, if that is where the jury lands.

So it is more than a lil’ preposterous that he thinks a felony trial should take a back seat to his social commitments. He can fete his son on any weekend when the court is closed. Yes, being an indicted potential felon is … inconvenient, dotard. “Don’t do the crime… if you can’t…” well, we all know the rest.

Onward, grinning.

नमस्ते

The Powerliners Were Silent — When 17 Injured And 1 Killed; Silent When 9 Gunned Down…

~ condor ~ 1 Comment

But let some people have to walk the last 1/5th of a mile — to get to their planes?!

And… “Oh. The. Humanities!”

Scott is a precious example of… hypocrisy.

Slowing traffic as a protest may not be the best strategy for winning hearts and minds, true… but it is First Amendment activity.

Driving a car at 40 mph into a crowd? Walking into a AME church — at prayers — and gunning down nine?

Not protected, Scott. Your religious bigotry / racism is showing in two decades of nearly tomb-like silence (involving violent whyte supremacists’ domestic terrorism) — and lack of proportionality, in response to what are protected (peaceful, if annoying) protests.

Do spare me your disingenuous theatrics Johnson.

Out.