In other items: Foreign-profit taxes cause 34 percent decline at Johnson & Johnson; and Merrill Lynch posts record 2004.

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Merck yesterday said fourth-quarter earnings fell 21 percent, hurt by the withdrawal of its blockbuster arthritis drug Vioxx last September.

But the drugmaker’s shares rose 3.7 percent on investor relief that the company did not deliver any unexpected bad news, analysts said.

Earnings fell to $1.1 billion, or 50 cents per share, from $1.4 billion, or 62 cents per share, a year earlier.

Merck said the withdrawal of Vioxx meant the loss of $700 million to $750 million in sales in the quarter. The drug was pulled off the market after it was found that it doubled the incidence of heart attack and stroke in a large cancer-prevention trial.

Shares of Merck closed up $1.10 to $30.95 yesterday.

Johnson & Johnson

Foreign-profit taxes cause 34 percent decline

Johnson & Johnson, the maker of thousands of products ranging from Tylenol to hip implants, said yesterday that fourth-quarter profit fell 34 percent because of taxes on foreign profits returned to the United States.

Net income dropped to $1.2 billion, or 41 cents a share, dragged down by the $789 million tax bill. Excluding the tax cost and a gain on a patent ruling, profit jumped 18 percent, beating analysts’ estimates and boosting the company’s shares.

Revenue increased 13 percent as sales at J&J’s three divisions — drugs, medical devices and consumer products — rose.

Excluding charges, J&J earned 67 cents a share, beating analysts’ expectations by 3 cents. Shares of Johnson & Johnson, a Dow industrial component, rose $2.23 to $63.72 yesterday. They gained 13 percent in the fourth quarter.

Merrill Lynch

Brokerage giant posts record 2004

Despite a slight dip in quarterly earnings, the brokerage giant Merrill Lynch reported strong full-year gains and comfortably beat Wall Street’s expectations for both the fourth quarter and all of 2004.

For the quarter ending Dec. 31, the company said yesterday it earned $1.19 billion, or $1.19 per share, down from $1.22 billion, or $1.19 a share, in the fourth quarter of 2003. Quarterly sales came to $5.89 billion, up 21 percent from $4.85 billion a year ago.

Analysts expected earnings of $1.10 per share on revenues of $5.28 billion.

Merrill Lynch shares rose $1.19, or 2.1 percent, to $57.99 yesterday.

For all of 2004, the brokerage earned $4.44 billion, or $4.38 per share, a 16 percent jump from 2003’s profit of $3.84 billion, or $3.87 a share.

Analysts expected Merrill Lynch to earn $4.30 per share, with revenues of $21.51 billion, for the full year.

Compiled from Bloomberg News, Reuters and The Associated Press