JNJ Johnson and Johnson

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)

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