J&J's Revenue Falls on Currency Woes
January 26 2016 - 8:10AM
Dow Jones News
Health-care giant Johnson & Johnson reported a 2.4% drop in
December quarter sales as adverse foreign exchange rates offset
strong growth in U.S. pharmaceutical sales.
The company also provided a mixed forecast for 2016, projecting
sales below analyst expectation but earnings excluding certain
items above views.
Chief Executive Alex Gorsky said the company's core business is
very healthy and that the company's recent actions will "position
us well to drive sustainable long-term growth, faster than the
markets we compete in."
Las week, J&J announced plans to cut about 3,000 jobs in its
medical-devices division, or about 2.5% of the company's total
workforce, in the company's latest step to revive the struggling
business.
The business used to be J&J's largest but has stumbled amid
pricing pressures, increased competition and market changes. In
response, J&J has exited certain business, rejiggered how it
sells devices and focused on high-growth categories like robotics
and staplers.
In the fourth quarter, J&J's medical device sales fell 3.3%
to $6.43 billion, representing about 36% of the company's
revenue.
Overall, J&J's revenue dropped 2.4% to $17.81 billion, below
the average analyst estimate of $17.88 billion on Thomson Reuters.
Unfavorable currency rates shaved 6.8% off the latest quarter's
total.
With about half of its sales overseas, J&J's results have
been pressured lately by a strengthening U.S. dollar and weakness
in some emerging markets.
J&J's pharmaceutical business, the company's largest, grew
0.8% to $8.06 billion, driven in part by a 12.7% increase in U.S.
pharmaceutical sales. Strong sales of the diabetes drug Invokana,
blood-cancer drug Imbruvica and blood-thinner Xarelto, offset a
sharp decline in the hepatitis drug Olysio, which is facing
increased competition.
Earnings in the fourth quarter rose to $3.22 billion, or $1.15 a
share, from $2.52 billion, or 89 cents a share. Excluding the
charge for medical devices and other items, J&J's had earnings
of $1.44 in the latest fourth quarter, above the average analyst
estimate of $1.42.
For 2016, J&J projected sales between $70.8 billion and
$71.5 billion, below analyst expectations of $71.89 billion, and
per-share earnings excluding certain items of $6.43 to $6.58, above
analyst expectations of $6.38.
Shares of J&J, down 5.7% over the past year, dropped 0.2% to
$96.25 in premarket trading.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
January 26, 2016 07:55 ET (12:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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