By Chelsey Dulaney
Johnson & Johnson on Tuesday nudged up its earnings guidance
for the year as its second-quarter results modestly topped
expectations despite the continued impacts of a strong dollar and
competition for its hepatitis C treatment.
J&J said it now expects to post per-share earnings of $6.10
a share to $6.20 a share, up from its previous guidance of $6.04 a
share to $6.19 a share. The company is benefiting from growth in
its new diabetes and anticlotting treatments, among other
items.
Shares, relatively flat over the past three months, edged up
0.7% in premarket trading.
New Brunswick, N.J.-based J&J is facing patent expirations
and increased competition for many of its pharma products, such as
its hepatitis C treatment Olysio. It also is preparing for the
threat of increased competition in the U.S. from lower priced
biosimilar versions of its blockbuster anti-inflammatory drug
Remicade.
Meanwhile, the strengthening of the U.S. dollar against foreign
currencies has hamstrung J&J and many of its health-care peers
in recent quarters. J&J said foreign-exchange rates had a
negative impact of 7.9% in the quarter.
Overall, J&J's pharmaceutical sales fell 6.6% to $7.9
billion in the quarter, as currency impacts and lower Olysio sales
offset 1% operational growth. J&J noted that a number of new
drugs helped drive operational growth in the quarter. Its
anticlotting treatment Xarelto saw sales surge 30.7% to $472
million, while sales of its Type 2 diabetes treatment Invokana
jumped to $318 million from $117 million a year ago.
Sales of its hepatitis C treatments, Olysio and Sovriad, dropped
to $264 million from $831 million a year earlier.
Meanwhile, consumer sales fell 7% to $3.5 billion, as a 9.3%
currency hit offset 2.3% operational growth. J&J's
consumer-health business has been working to recover from a series
of recalls of popular over-the-counter medicines including
children's Tylenol.
The company said Tuesday that it was helped by sales of Zyrtec
allergy medications and Tylenol analgesics.
Excluding acquisitions, divestitures, and hepatitis C sales,
J&J's total underlying operational growth was 5% in the
quarter.
Overall, J&J reported a profit of $4.52 billion, or $1.61 a
share, up from $4.33 billion, or $1.51 a share, a year earlier.
Excluding certain items, per-share earnings were $1.71 in the
latest quarter.
Revenue fell 8.8% to $17.79 billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.67 and revenue of $17.75 billion.
The company's medical-device business posted a sales decline of
12.2% to $6.36 billion, reflecting an operational decrease of 4.7%
and a negative currency impact of 7.5%.
Backing out the impact of acquisitions and divestitures,
operational sales growth was 1.4%, helped by sales of endocutters
in the surgical care business and joint reconstruction
products.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Corrections & Amplifications
Johnson & Johnson's Xarelto treatment posted a 30.7%
increase in sales in the second quarter, while Invokana sales
jumped to $318 million from $117 million a year earlier. An earlier
version of this article misstated the increases.
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