Earnings Update: Merck, PepsiCo, and Eaton Release Q4 Results

In the latest earnings season, Merck & Co., PepsiCo, and Eaton Corporation have released their financial results for the fourth quarter and full year of 2025. Each company has demonstrated varying degrees of success against expectations, with insights into their future guidance providing a roadmap for investors and stakeholders.

Q4 Results Highlight Diverging Earnings and Revenue Trends

Merck & Co. (NYSE: MRK) reported its fourth-quarter earnings with mixed results. The pharmaceutical giant met its earnings per share (EPS) expectation of $2.04 but surpassed its revenue expectation, reporting $16.4 billion against the anticipated $16.18 billion.

This revenue beat was primarily driven by strong sales in oncology and animal health, despite a notable decline in their Gardasil vaccine sales. Merck’s non-GAAP EPS for the quarter stood at $2.04, reflecting a 19% increase from the previous year, highlighting the company’s operational strength amidst restructuring costs and business development charges.

PepsiCo (NASDAQ: PEP) exceeded both its EPS and revenue expectations for the fourth quarter, reporting an EPS of $2.26 against the expected $2.24 and revenues of $29.34 billion, surpassing the anticipated $28.98 billion.

The beverage and snack giant attributed its success to strong productivity savings and accelerated net revenue growth, particularly in North America and international markets. PepsiCo’s core EPS grew by 11% in constant currency, showcasing the effectiveness of its strategic initiatives in offsetting cost increases and driving profitability.

Eaton Corporation (NYSE: ETN) also reported a strong fourth quarter, with an EPS of $3.33, slightly above the expected $3.32. The company’s revenue matched expectations at $7.1 billion.

Eaton’s record segment margins of 24.9% and a 19% increase in EPS compared to the previous year underscore its robust operational performance. The company’s electrical and aerospace segments were key contributors to this growth, with significant backlog and order acceleration driving continued success.

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Companies Lay Out 2026 Expectations Amid Evolving Market Conditions

Looking ahead, Merck has provided a cautious yet optimistic outlook for 2026. The company anticipates worldwide sales to be between $65.5 billion and $67.0 billion, with non-GAAP EPS expected to range from $5.00 to $5.15.

This guidance reflects a one-time charge related to the acquisition of Cidara, impacting EPS by approximately $3.65 per share. Merck’s strategic focus on advancing its pipeline and portfolio, particularly in oncology and vaccines, is expected to drive future growth.

PepsiCo has reaffirmed its 2026 guidance, projecting organic revenue growth between 2% and 4% and core constant currency EPS growth between 4% and 6%. The company also announced a 4% increase in its annual dividend, marking its 54th consecutive annual increase.

PepsiCo’s strategic initiatives, including product innovation and value offerings, are expected to bolster its market position and drive sustained growth across its global operations.

Eaton Corporation has issued a positive outlook for 2026, with expected EPS between $11.57 and $12.07, and adjusted EPS between $13.00 and $13.50. The company anticipates organic growth of 7% to 9% and segment margins of 24.6% to 25.0%.

Eaton’s strategic investments in capacity expansion and digitalization are poised to capitalize on global growth trends, positioning the company for continued success in the electrical and aerospace markets.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.