Health care giant Johnson & Johnson (JNJ) reported Tuesday a higher profit for its third quarter, which came above market projections, reflecting strong Pharmaceutical sales. Meanwhile, total sales edged down from the prior year and also missed market estimates, reflecting lower U.S. sales. However, the company lifted its fiscal 2010 adjusted earnings forecast to a range which could meet or beat analysts' view.
The New Brunswick, New Jersey-based company's third-quarter net earnings rose 2.2% to $3.42 billion from $3.35 billion in the same quarter last year.
On a per-share basis, earnings grew 2.5% to $1.23 from prior year's $1.20. On average, 18 analysts polled by Thomson Reuters expected the company to have earned $1.15 per share in the quarter. Such estimates typically exclude special items.
Meanwhile, sales to customers for the quarter edged down 0.7% to $14.982 billion from $15.081 billion in the prior year quarter, and also came in below market consensus of $15.18 billion.
Domestic sales declined 2.5% year-over-year to $7.13 billion, while international sales increased 1.1% to $7.85 billion, reflecting operational growth of 2.6% and a negative currency impact of 1.5%. European sales dropped 6.4%, while sales from Western Hemisphere excluding U.S. grew 6.4%, and Asia-Pacific, Africa sales increased 9.7%.
Commenting on the results, William Weldon, Chairman and Chief Executive Officer, said, "We continue to deliver solid earnings while investing in our future through complementary strategic partnerships and acquisitions. Our pharmaceutical business has returned to growth this year and we continue to advance our pipeline with promising clinical data in key therapeutic areas."
Worldwide Consumer sales fell 10.6% to $3.57 billion, consisting of an operational decline of 10.2% and a negative impact from currency of 0.4%. Of the Consumer sales, domestic sales decreased 24.5%, and international sales edged down 0.3%.
In the Pharmaceutical segment, sales of $5.5 billion grew 4.7% from the prior year, with operational growth of 5.9% and a negative impact from currency of 1.2%. Domestic sales increased 6.9%, and international sales rose 2%.
Johnson & Johnson noted that several of its products had strong operational growth during the quarter. These include sales of Remicade for the treatment of immune mediated inflammatory diseases, HIV treatment Prezista, international sales of Risperdal Consta Long-Acting Treatment - an antipsychotic medication, and Intelence - a next generation non-nucleoside reverse transcriptase inhibitor for HIV, among others.
The company's sales from Medical Devices and Diagnostics grew 1.3% from last year to $5.92 billion, with a 1.2% rise in domestic sales and 1.4% increase in international sales.
In the second quarter of the current fiscal, the company reported net earnings of$3.449 billion or $1.23 per share, adjusted net earnings of $3.382 billion or $1.21 per share, and sales of $15.3 billion.
Further, Johnson & Johnson raised today its full-year 2010 earnings guidance to $4.70 to $4.80 per share, reflecting recent currency exchange rates. The company's guidance excludes the impact of special items. Earlier, the company had expected earnings for full-year 2010 to be in the range of $4.65 to $4.75 per share, excluding special items.
Analysts expect the company to report earnings of $4.70 per share for fiscal 2010, with estimates ranging between $4.66 and $4.75 per share.
While announcing the second-quarter results, the company had lowered its full-year 2010 earnings outlook citing the impact of the voluntary recalls of some over-the-counter medicines and the suspension of manufacturing at the McNeil Consumer Healthcare facility, as well as unfavorable changes in foreign currency exchange rates.
JNJ is currently trading at $62.50 in pre-market activity, down $1.36 or 2.13%. For the past year, the stock has been trading in the range of $56.86-$66.20.
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