Johnson & Johnson Profit Tops Estimates as Drug Sales Rise
Johnson & Johnson reported quarterly earnings that topped analysts’ estimates as new cancer and diabetes treatments helped push drug sales higher.
First-quarter earnings, excluding one-time items, were $1.56 a share, compared with the $1.53 average estimate of analysts compiled by Bloomberg.
Pharmaceutical sales climbed 3 percent to $7.7 billion. The results underscore the company’s push to replenish its product lineup as drugs such as hepatitis C treatment Olysio and blood thinner Xarelto face new competition.
An additional challenge comes from the strong dollar, since J&J gets about half its sales outside the U.S. The company cut its forecast for full-year earnings to a range of $6.04 to $6.19 a share, down from a prior prediction of $6.12 to $6.27, because of the currency fluctuations. Analysts had predicted $6.17 on average, according to data compiled by Bloomberg.
“If you look operationally -- let’s take out foreign exchange -- the numbers are actually fairly strong,” said Tony Butler, an analyst at Guggenheim Securities LLC. “They’re still growing the pharma business, principally in immunology and oncology.”
J&J probably won’t be alone in warning that the stronger dollar will continue to hurt earnings this year. Last quarter, the health-care company was the first of many drugmakers to report lower-than-expected guidance or sales declines due to the U.S. currency’s gain.
J&J’s consumer unit, which makes over-the-counter products like Tylenol and Motrin, fell 4.7 percent to $3.4 billion. Revenue for the medical-device business, which has been under pressure from cost-cutting by insurers and hospitals, dropped 11.4 percent to $6.3 billion.
Bloomberg News, edited by ESM