“These results clearly set the stage for our performance in 2007 as well as continued progress toward our long-term financial targets,” says a bullish Dick Clark, Merck’s ceo.

Fourth-quarter net income was $473.9 million, or 22 cents, down from $1.12 billion, or 51 cents per share. Excluding charges of 7 cents restructuring and 21 cents for buying Sirna Therapeutics, Merck would have posted earnings per share of 50 cents, matching the consensus forecast of analysts surveyed by Thomson Financial.

Revenue, meanwhile, rose 5 percent, to $6 billion from $5.8 billion a year earlier. Analysts expected sales of $5.4 billion. However, revenue was obviously hurt last year by the Zocor patent expiration.

Legal expenses continue to eat into finances. Merck added $75 million to reserves for Vioxx lawsuits and a $48 million charge to create a reserve for litigation over its Fosamax osteoporosis drug, which has been linked to osteonecrosis of the jaw.

[tags]Fosamax, Merck, Vioxx[/tags]