J&J beats profit forecast, sticks to full-year view
Johnson & Johnson (JNJ-N) reported better-than-expected earnings due to a turnaround for its prescription medicines and stabilizing sales of over-the-counter medicines that have been repeatedly recalled in the past two years due to quality control lapses.
Results were also greatly helped by the weaker dollar, which boosts the value of sales in overseas markets, and sharply lower taxes.
The diversified healthcare company Tuesday said it had net earnings in the second quarter of $2.78 billion US, or $1.00 per share, compared with $3.45 billion, or $1.23 per share, in the year-earlier period.
Excluding special items, J&J earned $1.28 per share—topping the average forecast of $1.24 per share among analysts polled by Thomson Reuters I/B/E/S.
Company sales jumped 8.3 percent to $16.6 billion, surpassing Wall Street's expectations of $16.23 billion. Sales would have risen only 2.6 percent if not for the weaker dollar.
Despite the profit and sales beats in the quarter, J&J stuck to its full-year profit view of $4.90 to $5 per share. That would reflect growth of up to 5 percent from last year's results.
Global sales of prescription drugs jumped 12.2 percent to $6.23 billion.
Sales of consumer products, including over-the-counter drugs, rose 4 percent to $3.79 billion.
The company said it was the first time its consumer medicines have scored sales gains since early 2010. Many of J&J's best-known brands, including Tylenol and Motrin painkillers and Rolaids antacid, have been frequently recalled since late 2009 due to quality-control lapses at three plants in the United States and Puerto Rico.
J&J's other major business, medical devices and diagnostics, saw sales rise 7.2 percent to $6.57 billion. Strong demand for surgical-care products, diabetes-care brands and contact lenses offset lower sales of J&J's stents used to prop open heart arteries that have been cleared of plaque.
J&J last month said it will stop selling drug-coated heart stents, a former profit driver for the company that has stumbled due to safety concerns and fierce competition.
It said it would end development of its Nevo heart stent and stop making its Cypher stent, ceding the field to Abbott Laboratories, Boston Scientific Corp and Medtronic Inc. J&J will continue, however, to sell its far less-lucrative bare metal stents.