Higher Drug Sales Aid J&J Results -- WSJ
April 17 2019 - 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 (April 17, 2019).
Higher prescription-drug sales helped Johnson & Johnson
offset softness in its consumer-products and medical-device
businesses and report better-than-expected first-quarter sales and
earnings, while slightly boosting its forecast of full-year
sales.
J&J shares rose 1.1% to $138.02 on Tuesday, as the stock
continued to rebound from a sharp selloff in late 2018 triggered by
fresh concerns about liability in litigation over the safety of
Johnson's Baby Powder and other talc-containing products.
"We are much more confident at this point in the year than maybe
we were a year ago," J&J CFO Joseph Wolk told analysts on a
conference call, referring to the financial forecast.
Analysts said the quarterly results and updated full-year
forecast show J&J is navigating through its challenges, which
also include competition from lower-cost generic drugs. "To us, the
good far outweighs any possible questions or concerns investors
could have on the quarterly performance," SVB Leerink analyst
Danielle Antalffy said in a research note.
J&J's world-wide pharmaceutical sales rose 4.1% to $10.24
billion, fueled by gains for anti-inflammatory drug Stelara and
cancer treatment Darzalex. Competition from generic drugs hurt
sales of arthritis treatment Remicade and cancer drug Zytiga.
J&J's second-biggest business by sales, medical devices,
posted a sales decline of 4.6% to $6.46 billion. Excluding
divestitures, acquisitions and currency effects, J&J said sales
grew 4.3%, helped by sales of cardiology devices and contact
lenses.
Global sales of J&J's consumer products, which include
brands such as Band-Aid and Tylenol, dropped 2.4% to $3.32 billion.
J&J said "broad market softness" affected results, including a
mild cold-and-flu season in Russia and Western Europe, which hurt
sales of certain over-the-counter drugs.
Sales of J&J's baby-care products dropped 14% globally,
which J&J attributed partly to inventory changes related to
launching new versions of products outside the U.S. J&J rolled
out the new versions in the U.S. last year.
J&J didn't break out sales of its talc-containing powders.
At least 13,000 lawsuits against the company allege that use of
Johnson's Baby Powder and other talc products caused ovarian cancer
and mesothelioma.
J&J didn't discuss the lawsuits in its earnings release or
on a conference call with analysts. It says decades of testing have
shown its baby powder is safe and asbestos-free, and that it
doesn't cause cancer. The U.S. Justice Department and the
Securities and Exchange Commission have issued subpoenas seeking
documents related to talc safety.
The New Brunswick, N.J.,-based company anticipates adjusted
earnings this year to be between $8.53 and $8.63 per share,
narrowed from its prior forecast of $8.50 to $8.65 a share. It
expects operational sales, excluding currency impact, to be between
$82 billion and $82.8 billion, up from $81.6 billion to $82.4
billion as previously targeted. Overall, sales rose 0.1% to $20.02
billion, ahead of analysts' expectations. J&J's profit fell 14%
from the year-ago quarter to $3.75 billion, or $1.39 a share.
Excluding various items, J&J earned $2.10 a share, topping
expectations.
Corrections & Amplifications Johnson & Johnson beat
analysts' expectations for adjusted earnings. A previous version of
this article incorrectly said that it missed expectations. (April
16)
Write to Peter Loftus at peter.loftus@wsj.com and Kimberly Chin
at kimberly.chin@wsj.com
(END) Dow Jones Newswires
April 17, 2019 02:47 ET (06:47 GMT)
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