$MRK Reports Venezuelan Currency Deval Will Take $0.05 Off Earnings

:Merck, known as MSD outside the United States and Canada, said today that it has completed a preliminary assessment of the impact of the Venezuelan government’s intention to devalue its currency effective Feb. 13, 2013.

As a result of the devaluation, the company will incur a one-time, after-tax loss due to exchange of approximately $0.05 per share in the first quarter of 2013 related to the remeasurement of the local balance sheet at the date of the devaluation. Also, the company expects the impact of the devaluation on ongoing operations to be approximately $0.02 per share spread over the balance of 2013.

Since Jan. 1, 2010, Venezuela has been designated hyperinflationary and, as a result, local foreign operations are remeasured in U.S. dollars with the impact recorded in income. On Feb. 8, 2013, the Venezuelan government declared its intention to devalue its currency (bolívar fuerte). The official exchange rate is expected to move from 4.30 VEF/$ to 6.30 VEF/$….”

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