JNJ Johnson and Johnson

By Jonathan D. Rockoff And Lisa Beilfuss 

Johnson & Johnson reported lower sales and profit in its latest quarter largely due to a stronger dollar that the company expects will keep squeezing its results.

Also on Tuesday, J&J said it plans to buy back up to $10 billion in stock, or about 3.7% of shares outstanding. The company said it would issue debt to fund the program and wouldn't give a timeline for the repurchases.

Despite the buybacks, Chief Financial Officer Dominic Caruso said on a conference call with analysts and investors that J&J was looking at potential acquisitions, and that size wasn't a factor.

J&J ended the latest period with about $17 billion in net cash.

"This is a higher level of cash than we typically hold, and we are actively looking for the right opportunities to use that capital," Mr. Caruso said.

He also commented about recent criticism of drug pricing, which analysts say has contributed to a drop in pharmaceutical and biotech shares amid fears of some kind of government crackdown.

Yet Mr. Caruso seemed to pour water on such a threat, saying politicians haven't reached a consensus on how to limit price increases while encouraging the discovery of new medicines.

Mr. Caruso said J&J is "very responsible in our drug pricing," which he said is based on data reflecting the drugs' benefits to patients and on medical costs saved.

"We think the real answer to this dilemma is to monitor and provide outcome-based metrics and not simply focus only on price," Mr. Caruso said.

About half of the company's sales are overseas, which has left results vulnerable to the strengthening dollar and slowing growth in emerging markets.

In the third quarter, unfavorable currency rates shaved 8.2% off J&J's top line. The company said its revenue slid 7.4% to $17.10 billion.

Profit fell 29.3% from the period a year earlier, to $3.36 billion. Earnings per share were $1.20, down from $1.66 a share. Aside from the stronger dollar, the company's results were also hit by some special items, divestitures and higher spending on marketing and research.

The comparison to last year's third quarter was also hurt by a plunge in sales for a hepatitis C drug, Olysio, which provided a surprising but brief sales jolt last year, before new pills hit the market and eroded its sales.

Olysio, which was approved for sale in 2013, accounted for about 7% of the company's overall pharmaceutical sales last year.

Despite the disappointing revenue figures, J&J lifted the floor of 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.

Earnings from J&J, of New Brunswick, N.J., are considered an industry bellwether because the company's lineup spans prescription drugs, medical devices and consumer-health items such as Tylenol cough and cold pills.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

October 13, 2015 12:33 ET (16:33 GMT)

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