By Geoffrey Smith
Investing.com — Stocks in focus in premarket trade on Wednesday, 5th February. Please refresh for updates.
8:15 AM ET: Merck (NYSE:) stock fell 1.5% after the pharma giant said it will spin off its lower-margin businesses into a new company, allowing it to focus on higher-margin, higher-cost drugs. Pfizer (NYSE:) and GlaxoSmithKline have taken similar steps in recent months.
The future Merck will concentrate on oncology, vaccines, hospital and animal health. It expects annual cost savings of $1.5 billion by 2024 and is targeting an operating margin of over 40%.
The company’s quarterly earnings were broadly in line with expectations.
General Motors (NYSE:) stock rose 1.1% after the company said it swung to a net loss of $194 million in the fourth quarter due to a six-week strike that took $2.6 billion of its basic operating profit. Adjusted earnings per share also fell short of expectations at 5 cents rather than the 11c consensus.
GM said it expects adjusted EPS of between $5.75 and $6.25, while cash flow will be between $13 billion and $14.5 billion.
GlaxoSmithKline ADRs (NYSE:) were down 1.0% after the company missed quarterly earnings forecasts by a wide margin. The company also said it expects additional costs from the proposed spin-off of its consumer healthcare unit of between 600 and 700 million pounds ($780-$910 million).
GSK said it expects adjusted earning per share to fall by as much as 4% at constant exchange rates, but said it would likely keep its dividend unchanged at 80 pence a share.
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