German drug and chemical maker Merck KGaA reported Monday that net income fell 28 percent to euro144 million ($216 million) in the third quarter as weak demand hurt revenue, but said its chemicals and liquid crystals divisions were recovering.

Merck, based in Darmstadt and unrelated to the U.S. company of the same name, said net income for the period compared with euro200 million in the July-September period of 2008.

Revenue for the period rose nearly 3 percent to euro1.94 billion from euro1.9 billion in 2008.

The company said for the whole of 2009 it should see the Merck Serono drug division's revenue rise 6 percent; the consumer health care division's revenue rise 5 percent _ both within the previously forecast range.

Meanwhile, the liquid crystals division's revenue is expected to rise 20 percent, compared with the 20 percent to 30 percent decline the company had previously forecast. Liquid crystals are used in computer and television screens.

The company said the performance and life science chemicals divisions' revenue would remain unchanged.

"The third-quarter figures are showing improvement compared to the first half of 2009," Karl-Ludwig Kley, Merck's chief executive said in the company's report.

"Even in our chemical businesses, which were substantially impacted by the economic crisis, we see a clear trend toward recovery. We now can say with confidence that Merck will deliver what it promised earlier in the year," Kley said.

Research and development costs climbed 17 percent to euro333 million in the third quarter, largely due to the number of late-stage clinical trials. Among the new products being developed at the pharmaceuticals and chemicals divisions were a drug to treat multiple sclerosis and a fast and simple water purity test.

The company's expenses included a third quarter charge of euro147 million related to the 2007 acquisition of Serono and a euro52 million provision for currency risk and potential losses in Venezuela.

Merck's Serono division reported a near 6 percent rise in revenue for the quarter. Revenue from the cancer drug Erbitux jumped 33 percent.

The consumer health care division saw revenue rise 11 percent on the year, while the liquid crystals division's revenue was down 12 percent. However, Merck said it sales of LCD televisions were rising strongly, especially in China and the U.S.

Revenue at the performance and life science chemicals division was down about 2 percent. The company said pigment production and revenue, for example, was returning back to "normal" levels.

Shares in Merck were about 2 percent lower at euro68.29 in morning trading in Frankfurt.

___

On the Net:

http://www.merck.de