Johnson & Johnson Results Driven by Pharmaceutical Sales Growth

By Allison Prang

Johnson & Johnson reported an increase in sales for its fourth quarter, largely spurred by its pharmaceutical business, but reported a loss because of effects from the new tax law.

The company swung to a loss of $10.71 billion, or $3.99 a share, compared with a profit of $3.81 billion, or $1.38 a share, in the year-ago period. The drop was largely because of a tax provision charge of $13.27 billion.

Excluding special items such as the tax provision, J&J's profit rose 9.5% to $4.78 billion, or $1.74 a share. Analysts polled by Thomson Reuters were expecting adjusted earnings of $1.72.

J&J, one of the largest U.S. health-products companies by revenue, said sales rose 12% to $20.2 billion. That growth was once again spurred by the company's pharmaceuticals business, where sales grew 18%.

The company's international pharmaceutical business grew by 21%, but sales in the U.S. were overall higher.

Analysts were expecting revenue of $20.07 billion.

J&J said it expects sales between $80.6 billion and $81.4 billion for 2018 and adjusted earnings per share between $8 and $8.20. Analysts had expected full-year adjusted earnings of $7.87 on revenue of $80.7 billion.

Shares rose 0.9% in premarket trading Tuesday.

In prepared remarks, Chief Executive Alex Gorsky commended the new tax law, saying it "enables Johnson & Johnson to invest in innovation at higher levels to help address the most challenging unmet medical needs" in the business.

The recent short-term government funding bill Congress passed on Monday included language suspending the 2.3% medical-device excise tax this year and in 2019. The tax, which an industry trade group J&J belongs to had lobbied against, applies to devices like artificial knees.

J&J, along with competitor Teva Pharmaceuticals, is also talking with Ohio's attorney general after the state sued the companies, alleging illegal marketing of opioid drugs. J&J has called the state's claims "baseless and unsubstantiated."

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

January 23, 2018 08:12 ET (13:12 GMT)

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