J&J Raises Forecast as Sales Rise -- WSJ
October 17 2018 - 3:02AM
Dow Jones News
By Peter Loftus and Kimberly Chin
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 17, 2018).
Johnson & Johnson reported higher revenue and profit for the
third quarter, as improved pharmaceutical sales helped offset
weakness in its medical-device business.
Global sales of J&J's cancer drugs, which include Zytiga for
prostate cancer and blood-cancer treatments Darzalex and Imbruvica,
jumped 36% for the quarter. Overall, sales at the company's
pharmaceutical unit -- its biggest business -- rose 6.7%.
But sales were less impressive in the New Jersey-based
health-care conglomerate's other two units, with consumer-product
sales up 1.8% and medical-device sales down 0.2% for the
quarter.
"Our positive view on pharma is offset by ongoing challenges to
the company's medical device and consumer franchises," JPMorgan
analyst Chris Schott wrote in a research note. "While today's
consumer results were encouraging, we believe it remains too early
to call for a broad recovery in these businesses."
J&J's results are considered a bellwether for many
health-care sectors because of the company's range of products.
J&J Chief Executive Alex Gorsky said the company was
accelerating sales momentum in its consumer business and making
"consistent progress" in the device unit.
Declines in sales of diabetes-care and orthopedics products
weighed on the medical-device division.
J&J executives said they weren't satisfied with the
performance of the medical-device unit, and are pursuing ways to
jump-start growth. The company has shed some underperforming device
units, and it's developing new products in-house and pursuing
external acquisitions to boost the unit, Ashley McEvoy, executive
vice president and world-wide chairman of medical devices, said on
a conference call with analysts.
In the consumer-product division, J&J posted improved sales
of over-the-counter drugs including the Tylenol pain reliever and
Zyrtec allergy medicine.
Global sales of baby-care products, such as Johnson's Baby
Shampoo, dropped 1%, but in the U.S. they jumped 20% after the
company introduced new versions of the products.
Overall, J&J's third-quarter sales rose 3.6% from a year ago
to $20.35 billion. Analysts polled by Refinitiv had expected $20.05
billion.
J&J's profit was $3.93 billion, or $1.44 a share, compared
with $3.76 billion, or $1.37 a share, in the same period last year.
The quarter included a noncash, after-tax impairment charge of
about $630 million, to reflect the diminished value of an
experimental infectious-disease drug after a clinical trial of the
drug was halted.
On an adjusted basis, excluding various costs and gains, J&J
made $2.05 a share, slightly above analysts' estimates of
$2.03.
J&J raised its forecast for full-year 2018 results. It now
expects earnings of $8.13 to $8.18 a share compared with previous
guidance of $8.07 to $8.17, excluding certain items.
J&J now expects sales for the year to be between $81 billion
and $81.4 billion, above its previous guidance of $80.5 billion to
$81.3 billion.
Shares of J&J rose 2.6% to $137.63 in morning trading.
Write to Peter Loftus at peter.loftus@wsj.com and Kimberly Chin
at kimberly.chin@wsj.com
(END) Dow Jones Newswires
October 17, 2018 02:47 ET (06:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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