RPT-UPDATE 2-Merck KGaA cuts FY sales outlook on LCD slowdown

(Repeats to add link to graphic)

* Q3 operating profit 363.5 mln eur vs 331 mln poll avg

* Sees 2010 sales up 19 pct vs previously up 21 pct

* Ups FY adj operating profit to +58 pct vs +55 pct

* Shares ease 1 pct, underperforming sector index (.SX4P: )

(Adds details, background)

By Ludwig Burger

DARMSTADT, Germany, Oct 26 (BestGrowthStock) – Germany’s Merck KGaA
(MRCG.DE: ) cut its full-year sales outlook to account for a
stronger euro and lower orders for its liquid crystal display
chemicals from television manufacturers.
The family controlled company now sees full-year sales up 19
percent this year, down from the 21 percent targeted earlier, as
a strong euro hits margins as key customers are based in Asia,
where currencies are more closely aligned with the dollar.

Oversupply is also hurting the company, as over-ambitious TV
sales targets left Asia’s manufacturers, such as LG Display
(034220.KS: ) with a glut of panels in August, weighing on prices
and forcing the industry to ramp down output. [ID:nTOE67U00A]

“We do not like the mix and expect shares to slightly
retreat due to cut LCD guidance,” a Frankfurt-based trader said.

Merck’s shares were down 1 percent at 0826 GMT, compared
with a 0.1 percent gain in the STOXX Europe 600 Chemicals
(.SX4P: ).

Graphic on LCD business http://r.reuters.com/gyd32q

The company, which traces its roots to a 17th-century
pharmacy, reported operating profit for the third quarter rose
64 percent to 363.5 million euros ($510.2 million), better than
the average estimate of 331 million euros in a Reuters poll.

The result was boosted by revenue from its acquisition of
U.S. lab equipment maker Millipore.

But the strong euro — up about 16 percent since its
four-year low against the dollar — is dampening the outlook for
the lab gear maker.

The gain in operating profit, adjusted for write-downs, at
the Millipore unit is now seen at 167 percent, less than the 190
percent predicted previously, following a “detailed examination”
of the new business, the company said.

Merck now expects core operating profit — which excludes
one-off charges and writedowns — to rise 58 percent this year,
compared with a previous outlook of plus 55 percent, because of
lower drug development and production costs.

Merck and its U.S. partner Oncothyreon (ONTY.O: ) in June
stopped a late-stage study of their experimental cancer vaccine
Stimuvax on breast-cancer patients. Late stage trials typically
account for about a third of all research and development costs
in the pharmaceuticals industry.
(Reporting by Ludwig Burger; Additional reporting by Christoph
Steitz and Louise Heavens)
($1=.7124 Euro)

RPT-UPDATE 2-Merck KGaA cuts FY sales outlook on LCD slowdown