Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Merck & Co. Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Sales	64,168)	60,115)	59,283)	48,704)	47,994)
Cost of sales	(15,193)	(16,126)	(17,411)	(13,626)	(15,485)
Gross profit	48,975)	43,989)	41,872)	35,078)	32,509)
Selling, general and administrative	(10,816)	(10,504)	(10,042)	(9,634)	(10,468)
Research and development	(17,938)	(30,531)	(13,548)	(12,245)	(13,558)
Restructuring costs	(309)	(599)	(337)	(661)	(578)
Operating income	19,912)	2,355)	17,945)	12,538)	7,905)
Interest income	415)	365)	157)	36)	59)
Interest expense	(1,271)	(1,146)	(962)	(806)	(831)
Exchange losses	(227)	(370)	(237)	(297)	(145)
Income (loss) from investments in equity securities, net	14)	340)	(1,419)	1,940)	1,338)
Net periodic defined benefit plan credit other than service cost	633)	498)	279)	212)	339)
Other, net	460)	(153)	681)	256)	126)
Other income (expense), net	24)	(466)	(1,501)	1,341)	886)
Income from continuing operations before taxes	19,936)	1,889)	16,444)	13,879)	8,791)
Taxes on income from continuing operations	(2,803)	(1,512)	(1,918)	(1,521)	(1,709)
Net income from continuing operations	17,133)	377)	14,526)	12,358)	7,082)
Income from discontinued operations, net of taxes	—)	—)	—)	704)	—)
Net income	17,133)	377)	14,526)	13,062)	7,082)
Net income attributable to noncontrolling interests	(16)	(12)	(7)	(13)	(15)
Net income attributable to Merck & Co., Inc.	17,117)	365)	14,519)	13,049)	7,067)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Sales: Sales exhibited a generally upward trend over the five-year period, increasing from 47,994 million US dollars in 2020 to 64,168 million US dollars in 2024. The most significant increase occurred between 2021 and 2022, with sales rising from 48,704 to 59,283 million US dollars.
Cost of Sales: Cost of sales fluctuated during the period, starting at 15,485 million US dollars in 2020, decreasing in 2021 to 13,626 million, then rising sharply to 17,411 million in 2022 before declining again in subsequent years to 15,193 million in 2024. This indicates variability in production or procurement costs relative to sales.
Gross Profit: Gross profit increased steadily from 32,509 million US dollars in 2020 to 48,975 million in 2024, reflecting improved profitability at the gross margin level despite the fluctuations in cost of sales. The sharp increase in gross profit coincides with the surge in sales, particularly between 2021 and 2022.
Selling, General, and Administrative Expenses (SG&A): SG&A expenses remained relatively stable, ranging from 9,634 to 10,816 million US dollars over the period. There was a slight increase observed in 2023 and 2024, suggesting controlled operational expenses despite growth in sales.
Research and Development (R&D): R&D expenses showed significant variability. After a moderate decrease from 13,558 million in 2020 to 12,245 million in 2021, expenses rebounded to 13,548 million in 2022. However, there was a remarkable spike to 30,531 million in 2023, more than doubling the previous figure, before dropping to 17,938 million in 2024. This suggests a substantial investment phase or restructuring in R&D activities during 2023.
Restructuring Costs: Restructuring costs were relatively low and fluctuated modestly between 309 and 661 million US dollars, with the lowest value in 2024, indicating minor restructuring activities throughout the period.
Operating Income: Operating income showed considerable volatility. It increased from 7,905 million in 2020 to a peak of 17,945 million in 2022, then dropped sharply to 2,355 million in 2023, likely impacted by the spike in R&D costs. It rebounded strongly to 19,912 million in 2024, reflecting recovery in operational profitability.
Interest Income and Expense: Interest income showed a steady increase from 59 million in 2020 to 415 million in 2024, indicating improved returns or investment income. Interest expense also increased from 831 million to 1,271 million, suggesting higher borrowing costs or debt levels.
Exchange Losses: Exchange losses varied but generally remained under 400 million, with no clear upward or downward trend, reflecting foreign exchange fluctuations with limited impact.
Income (Loss) from Investments in Equity Securities: This line exhibited notable volatility: positive gains in 2020 and 2021, followed by a significant loss in 2022 (-1,419 million), then modest positive income in the subsequent years, indicating fluctuating performance or valuation of invested equity securities.
Net Periodic Defined Benefit Plan Credit: This credit increased over time from 339 million in 2020 to 633 million in 2024, suggesting improvements or favorable adjustments in defined benefit pension plans.
Other Income (Expense), Net: Other income/expense showed irregular patterns, with positive values early in the period followed by negative values in 2023 and a positive value again in 2024. This volatility indicates inconsistency in miscellaneous income or expenses.
Income from Continuing Operations Before Taxes: This income rose from 8,791 million in 2020 to 16,444 million in 2022, declined sharply to 1,889 million in 2023, and then recovered to 19,936 million in 2024, paralleling operating income trends.
Taxes on Income from Continuing Operations: Taxes fluctuated within a range, peaking at 2,803 million in 2024. Despite fluctuations in pre-tax income, taxes remained a consistent portion of earnings, with no irregular spikes or drops.
Net Income from Continuing Operations: Net income from continuing operations rose markedly from 7,082 million in 2020 to 14,526 million in 2022, plummeted to 377 million in 2023, and rebounded strongly to 17,133 million in 2024, reflecting the sharp operating income fluctuations and the impact of significant R&D spending in 2023.
Income from Discontinued Operations: Income from discontinued operations was only recorded in 2021 at 704 million, indicating a one-time gain or loss during that year.
Net Income: Net income followed the same pattern as net income from continuing operations, confirming that discontinued operations had minimal overall impact except in 2021.
Net Income Attributable to Noncontrolling Interests: Amounts attributable to noncontrolling interests remained small and stable, ranging between -7 and -16 million, with no significant influence on total net income.
Net Income Attributable to the Company: This closely mirrored total net income, increasing from 7,067 million in 2020 to 14,519 million in 2022, declining to 365 million in 2023, then recovering to 17,117 million in 2024, reflecting the company's direct earnings performance.

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Merck & Co. Inc. (NYSE:MRK)

Income Statement