Johnson & Johnson Raises Sales Outlook

By Imani Moise

Johnson & Johnson reported higher-than-expected sales in its latest quarter and boosted its sales outlook for the year despite ongoing pricing pressures in the drug industry.

Shares rose 0.7% to $132.75 during premarket trading as J&J, one of the biggest sellers of prescription drugs in the U.S., also beat analysts' profit expectations.

The company now expects 2018 sales of $81 billion to $81.8 billion and earnings in the range of $8 to $8.20 a share. Analysts polled by Thomson Reuters had forecast earnings of $8.10 a share on $81.13 billion in revenue.

J&J in March reported the average price paid for its medicines in the U.S. fell by 4.6% last year due to the company's discounts and said it expected competition in the pharmaceutical business to continue throughout the year.

Sales in its pharmaceutical business, its largest by revenue, jumped 19% to $9.84 billion in the first quarter while sales in its consumer and medical-devices segments rose 5.3% and 7.5%, respectively.

Chief Executive Alex Gorsky said in prepared remarks the company will use savings from the recently enacted tax overhaul to increase investment in research and development by 15%, spending $30 billion over the next four years.

Overall for the quarter the New Jersey-based company reported a profit of $4.37 billion, or $1.60 a share, down from $4.42 billion, or $1.61 a share, a year earlier. Excluding special items profit rose 13% to $2.06 a share.

Revenue also jumped 13% to $20.01 billion. Analysts had forecast earnings of $2.02 a share on $19.46 billion in revenue.

J&J's stock has fallen 5.7% so far this year, while the S&P 500 has gained 0.2%.

Write to Imani Moise at imani.moise@wsj.com

(END) Dow Jones Newswires

April 17, 2018 08:15 ET (12:15 GMT)

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