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Johnson & Johnson Q4 Results Top Estimates; Sees FY18 Profit Above View

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Johnson & Johnson (JNJ) reported a loss for the fourth quarter of 2017, compared to profit last year. The latest-quarter result included after-tax intangible amortization expense of about $0.9 billion and a net charge for after-tax special items of about $14.6 billion. Quarterly sales increased 11.5%. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. It projected adjusted earnings per share for fiscal year 2018 above analysts estimation.

"… We are pleased with the passage of recent legislation modernizing the U.S. tax system, which enables Johnson & Johnson to invest in innovation at higher levels to help address the most challenging unmet medical needs facing health care today," said Alex Gorsky, Chairman and Chief Executive Officer.

In the Tuesday pre-market, JNJ is trading at $149.88, up $1.75 or 1.18%.

Looking ahead for full-year 2018, the company expects adjusted earnings of $8.00 to $8.20 per share reflecting expected operational growth in the range of 6.8% to 9.6%. Analysts expect annual earnings of $7.87 per share.

It projects 2018 sales to be in the range of $80.6 billion to $81.4 billion reflecting expected operational growth in the range of 3.5% to 4.5%. Analysts expect the company to report revenues of $80.7 billion for 2018.

Net loss for the fourth quarter of 2017 was $10.71 billion or $3.99 per share, compared to profit of $3.81 billion or $1.38 per share in 2016. The latest-quarter result included after-tax intangible amortization expense of approximately $0.9 billion and a net charge for after-tax special items of approximately $14.6 billion. Included in these special items is a provisional amount of approximately $13.6 billion associated with the recent enactment of tax legislation.

The prior year result included after-tax intangible amortization expense of approximately $0.3 billion and a net charge for after-tax special items of approximately $0.3 billion.

Excluding after-tax intangible amortization expense and special items, adjusted net earnings for the quarter were $4.78 billion or $1.74 per share, compared to $4.36 billion or $1.58 per share last year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.72 per share for the fourth-quarter. Analysts' estimates typically exclude special items. On an operational basis, adjusted earnings per share increased 5.7%.

Quarterly sales were $20.20 billion, an increase of 11.5% from last year's $18.11 billion. Wall Street expected revenues of $20.07 billion for the quarter.

Operational sales results increased 9.4% and the positive impact of currency was 2.1%. Domestic sales increased 9.8%. International sales increased 13.5%, reflecting operational growth of 9.0% and a positive currency impact of 4.5%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales for the fourth quarter of 2017 increased 4.2%, domestic sales increased 4.1% and international sales increased 4.3%.

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