Is it smoking like a 2 stroke on start up?  If so it sounds like your rings didn't seat well during break in.  Once the motor warms up and everything swells to make good a good seal it should run fine and clean up (thats if the rings aren't seated proper).  If it's a little bit of black smoke your ok.  If it doesn't smoke like a 2 stroker on start up then I'd say it's running fat for a cold start up which is normal, but usually it cleans up rigth away.  Depends on how they have it programed to run ya know.  They can program it to squirt a certain amount of fuel at different engine temps and air temps while at a constant manifold pressure (idle) and as the motor comes up to temp they can pull fuel out at the elevated temps.  Call the dealer or Mercury and ask about what it's doing to see if others do the same thing.

Hello TRC, to add just a bit more to what Kix said, if it is smoking blue smoke this is generally an indication of motor oil usage. If it clears up after a bit that might be an indication of bad valve seals. The oil that is in the area of the head or on the other side of the combustion chamber will pool with oil when the valve seals are bad, this pooled or collected oil will then be sucked into the combustion chamber and burned upon start up causing the heavy blue smoke. As the engine runs it will still likely use a bit of oil but the visible indications(blue smoke) may not be nearly as noticeable. This oil soaking from leaking can somewhat foul the ends of the plugs while the heavy smoking is going on, yet once everything has warmed up the cylinders will start doing their job and the engine will smooth out. This may still cause premature failure of the plugs however. Since this is a 4 stroke and a vertical crankshaft at that, the oiling system is likely a bit different than those found in other 4 stroke engines, so I could be a bit off in my description. Something to consider. Best regards, aevald