J&J Profit Jumps 12.5 Percent, Despite Sales Dip
Johnson & Johnsonsaid Tuesday that first-quarter profit jumped 12.5 percent, as lower spending on research, sales, and administration more than made up for a slight decrease in sales due to generic competition.
The health-care giant said net income was $3.91 billion, or $1.41 per share, up from $3.48 billion, or $1.25 per share, in 2011's first quarter.
Excluding costs related to a pending acquisition and a benefit from currency rates, the company earned $3.8 billion, or $1.37 per share.
Revenue dipped 0.2 percent, to $16.14 billion from $16.17 billion.
Analysts had expected the company to report earnings excluding items of $1.35 per share on revenue of $16.26 million, according to Thomson Reuters.
The New Brunswick, N.J., company also raised its annual profit forecast by 2 cents, to $5.07 to $5.17 per share, excluding one-time items. Analysts expect earnings per share of $5.11 for the year.
Revenue rose 1.2 for prescription drugs, to $6.13 billion from $6.06 billion, as sales from new medicines made up for lower sales from two medicines that got generic competition last spring, Levaquin for serious infections and Concerta for attention deficit disorder. But revenue was down in J&J's other two businesses.
Sales of medical devices and diagnostic equipment, the company's biggest segment, slumped 0.3 percent to $6.41 billion. Consumer product sales fell 2.4 percent, to $3.6 billion, due to the many products still not back in stores due to product recalls.
The company has been plagued by nearly 30 recalls since September 2009 for Tylenol and a host of other nonprescription medicines, plus faulty hip implants and contact lenses and a couple of its prescription drugs.
J&J continues to lose hundreds of millions of dollars a year because of manufacturing quality problems. The company is operating under increased government oversight and was forced to gut and rebuild a huge factory in suburban Philadelphia.
It's also recently been hit by a fine of more than $1.1 billion from an Arkansas judge for downplaying and concealing risks of its former blockbuster schizophrenia drug Risperdal, such as major weight gain and developing diabetes. That ruling, which will be appealed, could affect dozens of pending lawsuits over the drug, many by states seeking reimbursement for what their Medicaid programs paid for the drug.
In December, a South Carolina judge upheld a $327 million civil penalty against J&J over Risperdal, and in January the company reached a $158 million settlement with Texas in which it didn't admit fault. J&J also is negotiating a settlement with the federal government that's expected to exceed $1 billion.
William C. Weldon, who will step down after a decade as CEO on April 26, said in a statement that he has "great confidence in the prospects of our business to deliver sustainable growth, well into the future."
Shares of the company were flat in trading on Tuesday.(Get real-time quotes for Johnson & Johnson here.)