Shares of Organon & Co. OGN, -1.66% shot up 7.1% in morning trading Thursday, after the pharmaceutical company and recent spinoff from Merck & Co. Inc. MRK, +0.55% reported second-quarter profit and revenue that beat expectations, amid strength in its women’s health business, and initiated a dividend that implied a yield that was well above its peer group. Net income fell to $427 million, or $1.68 a share, from $542 million, or $2.14 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share was $1.72. The results beat the Wall Street EPS consensus of $1.42, according to FactSet. Revenue rose 5% to $1.595 billion, above the FactSet consensus of $1.522 billion, as established brands revenue fell 4% to $1.045 billion while revenue from women’s health grew 19% to $417 million and from biosimilars increased 43% to $86 million. The company initiated a quarterly dividend of 28 cents a share, payable Sept. 13 to shareholders of record on Aug. 23. Based on current stock prices, the annual dividend rate implies a dividend yield of 3.50%, compared with the yield for the SPDR Health Care Select Sector ETF XLV, +0.28% of 1.33% and the implied yield for the S&P 500 SPX, +0.09% of 1.35%.
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