Merck and Schering-Plough, the two pharmaceuticals on track to merge by the end of the year, on Tuesday reported second-quarter earnings that were better than expected.

Merck said second-quarter earnings fell almost 12 per cent to $1.6bn as the strengthening dollar, lower vaccine sales and a higher effective tax rate bit into its bottom line, but still soundly beat analysts’ expectations. Earnings per share, excluding the costs of the expected merger with Schering-Plough and other one-time expenses, fell 3.4 per cent to 83 cents. Analysts had expected earnings of $0.77 a share. Including the special expenses, Merck’s earnings per share fell 9.8 per cent to $0.74 cents.