New York: Johnson & Johnson reported stronger than expected quarterly revenue and earnings, helped by the weaker dollar and higher sales of prescription drugs, sending shares 2% higher.
The impressive results for the diversified healthcare company, which raised its 2011 profit view, came in spite of recalls that have battered sales of its consumer medicines.
J&J said on Tuesday it earned $3.48 billion, or $1.25 per share. That compared with $4.53 billion, or $1.62 per share, in the year-earlier period, when J&J had substantial tax gains.
Excluding special items, including litigation expenses and the cost of recalling hip replacement products, J&J earned $1.35 per share. That topped the average forecast of $1.26 per share among analysts polled by Thomson Reuters I/B/E/S.
Company sales rose 3.5% to $16.17 billion, above Wall Street expectations of $15.84 billion.
J&J has recalled more than 300 million packages of Tylenol and other consumer medicines in the past 16 months after regulators cited grime, faulty procedures and other quality-control lapses at a plant in Fort Washington, Pennsylvania, and other factories. It is fixing the quality control problems under close supervision from the US government.
Global sales of consumer products fell 2.2% to $3.68 billion, with US revenue tumbling 14% to $1.35 billion. But that was an improvement from a 29% decline in US sales seen in the prior quarter.
“I think we’re seeing an inflection point in the consumer group,” said Morningstar analyst Damien Conover. “You’re beginning to get to where the company has had more time to fix some of the problems.”
In its earnings report, J&J did not make any reference to reports that it is negotiating to acquire Swiss medical device maker Synthes Inc for about $20 billion, which would make it the biggest deal in J&J’s history.
Synthes on Monday had confirmed it was in merger talks with J&J, whose medical devices are one of its three main businesses, along with prescription drugs and consumer products. J&J on Monday declined to comment on the potential deal.
Sales of J&J’s medical devices rose 3.3% in the quarter to $6.43 billion. Their growth was overshadowed by prescription drugs, whose sales rose 7.5% to $6.1 billion in the quarter.
Conover said the consumer products and pharmaceuticals groups performed better than expected, while the medical device segment came in roughly in line with expectations.
J&J said it now expects earnings of $4.90 to $5.00 per share for the full year, from its earlier view of $4.80 to $4.90 per share.
Company shares rose to $61.67 in premarket trading.