Johnson & Johnson Raises Guidance -- Update
July 19 2016 - 8:47AM
Dow Jones News
By Anne Steele
Johnson & Johnson on Tuesday raised its guidance for the
year again as the health-care giant topped expectations in the
latest quarter, helped by growth in its pharmaceutical
business.
The New Brunswick, N.J., company now expects earnings for the
year of $6.63 to $6.73 a share, up from previous guidance for $6.53
to $6.68 a share. It also raised its revenue forecast to a range
from $71.5 billion to $72.2 billion, up from $71.2 billion to $71.9
billion.
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. But Chief Executive Alex Gorsky pointed
to "strong underlying growth" across the company, noting the
continued success of new products.
J&J's pharmaceutical business, the company's largest, grew
8.9% to $8.65 billion, lifted by a 13.2% increase in U.S.
pharmaceutical sales. The company highlighted strong growth in new
products, including blood-cancer drug Imbruvica, blood thinner
Xarelto, multiple myeloma drug Darzalex, Type 2 diabetes treatments
Invokana and Invokamet, and prostate cancer drug Zytiga. Sales of
hepatitis C drug Olysio, which has been outflanked by newer drugs,
continued to slow.
Other J&J businesses, however, didn't perform as well.
In the second quarter, sales of J&J consumer health products
slipped 1.8% to $3.42 billion, largely due to Venezuela's
devaluation of its currency. The consumer business has been
recovering from supply-chain problems that led to recalls.
J&J's medical device sales, meanwhile, edged a 0.8% increase
to $6.41 billion, which represents about 35% of the company's
revenue.
The medical-device 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 areas,
rejiggered how it sells devices and focused on high-growth
categories like robotics and staplers. 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.
In all for the quarter ended June, earnings fell to $3.99
billion, or $1.43 a share, from $4.52 billion, or $1.61 a share, in
the same period last year. Excluding certain items, adjusted
earnings rose to $1.74 a share. Revenue ticked up 3.9% to $18.5
billion. Unfavorable currency rates shaved 1.4% off the latest
quarter's total.
Analysts had projected earnings of $1.68 a share on $17.97
billion in revenue, according to Thomson Reuters.
Shares, up 20% this year, rose 2.5% in premarket trading.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
July 19, 2016 08:32 ET (12:32 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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