JNJ Johnson and Johnson

By Anne Steele 

Johnson & Johnson raised its guidance for the year as the health-care giant beat earnings expectations in the first quarter despite foreign exchange rates dragging revenue growth.

The company now expects earnings for the year of $6.53 to $6.68 a share, up from previous guidance for $6.43 to $6.58 a share. J&J anticipates revenue of $71.2 billion to $71.9 billion, compared with previous guidance for $70.8 billion to $71.5 billion.

Chief Executive Alex Gorsky said the strong start to the year was supported by underlying sales growth.

"Our pharmaceuticals business continues to deliver impressive levels of growth, we have steady improvement in our consumer business, and we are seeing momentum in our medical-devices businesses, all of which are fueling our optimism for the full year ahead," Mr. Gorsky said.

In January, 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, the company's latest step to revive the struggling business.

The business used to be J&J's largest, but it 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 first quarter, J&J's medical device sales fell 2.4% to $6.11 billion, which represents about 35% of the company's revenue.

Earnings in the first quarter fell to $4.29 billion, or $1.54 a share, from $4.32 billion, or $1.53 a share, in the same period last year. Excluding certain items, J&J had earnings of $1.68 a share in the latest quarter. Revenue edged up 0.6% to $17.48 billion. Unfavorable currency rates shaved 3.3% off the latest quarter's total. Analysts had projected earnings of $1.65 a share on $17.48 billion in revenue, according to Thomson Reuters.

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 5.9% to $8.18 billion, lifted by a 12.9% increase in U.S. pharmaceutical sales. Strong sales of the diabetes drug Invokana, blood-cancer drug Imbruvica, blood-thinner Xarelto and multiple myeloma drug Darzalex, offset lower sales of the hepatitis drug Olysio, which is facing increased competition.

Shares of J&J, added 1.4% in light premarket trading to $112.50 after rising 14% over the past three months.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

April 19, 2016 07:37 ET (11:37 GMT)

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