Johnson & Johnson Raises 2016 Profit Forecast After Drug Sales Increase
Johnson & Johnson increased its full-year profit and sales forecast after second-quarter profit topped analysts’ estimates, driven by growth in the pharmaceutical division, home to blockbuster products such as arthritis treatment Remicade.
The shares rose 3.1 percent to $127 at 7:18 a.m. in New York, before the markets opened. The stock has been trading at all-time highs as J&J relies on prescription medicines like Remicade and psoriasis drug Stelara to drive sales and stem a slowdown from the medical devices division. Remicade accounted for about 20 percent of drug revenue for the New Brunswick, New Jersey-based company last quarter.
The world’s biggest maker of health-care products raised its earnings forecast to $6.63 to $6.73 a share, excluding some items, from $6.53 to $6.68 previously. Analysts anticipated $6.61.
In the second quarter, earnings were $1.74 a share, excluding some items, compared with the $1.68 average of 20 predictions compiled by Bloomberg. Drug sales increased 8.9 percent during the period, helping offset a decline in consumer products, while revenue from medical devices were little changed.
Sales at the consumer business – which includes Johnson’s baby-care products, Neutrogena and Listerine - fell 1.8 percent from the previous year. The company’s medical device sales increased by 0.8 percent versus the previous year
J&J’s shares have almost doubled since the start of 2010 as its drug division sales grew 9 points to 45 percent of revenue. The company has topped earnings estimates every period since the 2010 fourth quarter.
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