JNJ Johnson and Johnson

By Lisa Beilfuss 

Johnson & Johnson said profit dropped in its latest quarter as adverse exchange rates hit revenue and as the health-care giant's hepatitis C treatment continues to face competition.

Separately Tuesday, J&J said it plans to buy back up to $10 billion in stock, or about 3.7% of shares outstanding, in a move to tweak its capital structure. The company said it would issue debt to fund the program.

The stronger U.S. dollar has pressured J&J's results in recent quarters. In the latest period, unfavorable currency rates shaved 8.2% off the top line.

Despite the disappointing revenue figures, J&J lifted its full-year earnings outlook to $6.15 to $6.20 a share, excluding certain items, up from an earlier range of $6.04 to $6.19.

In addition to currency headwinds, J&J is facing patent expirations and increased competition for many of its pharma products, such as its hepatitis C treatment Olysio. Sales of the drug have weakened since a rival pill from Gilead Sciences hit the market, and on Tuesday J&J said lower Olysio sales, due to new entrants, offset growth in its diabetes drug Invokana, its blood-cancer drug Imbruvica and its blood-thinner Xarelto. Olysio, approved in 2013, last year represented about 7% of the company's overall pharmaceutical sales.

The company is also grappling with competition from lower-cost knockoffs of its blockbuster anti-inflammatory drug Remicade. In its prescription drug unit, which has been the New Brunswick, N.J., company's bright spot, revenue declined 7.4% to $7.69 billion, thanks in large part to a stronger dollar that makes its products more expensive abroad.

Sales at the consumer-health unit fell 7.7% to $3.31 billion as the foreign exchange effect offset a 3.1% revenue increase driven by over-the-counter products like Tylenol and personal-care products including Listerine. The company's medical-device business continued to struggle and posted a sales decline of 7.3% to $6.09 billion.

In all, J&J reported a profit of $3.36 billion, or $1.20 a share, down from $4.75 billion, or $1.66 a share, a year earlier. Excluding items, per-share profit fell to $1.49 from $1.61. Revenue slid 7.4% to $17.10 billion.

Analysts had projected $1.45 in earnings per share and $17.45 billion in revenue, according to Thomson Reuters.

Shares in the company, up 0.7% this year, declined 2% premarket.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

October 13, 2015 09:05 ET (13:05 GMT)

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