J&J Q3 net income drops 7 percent on higher costs

by Linda A. Johnson
In this Monday, July 16, 2012, photo, Johnson & Johnson products are displayed in Orlando, Fla. Johnson & Johnson's third-quarter profit fell 7 percent as increased research and production costs offset higher sales for its medicines and medical devices and new revenue from its biggest acquisition ever. (AP Photo/John Raoux, File)

Johnson & Johnson's third-quarter profit fell 7 percent as increased research and production costs offset higher sales for its medicines and medical devices and new revenue from its biggest acquisition ever.

The maker of Tylenol, baby shampoo and prescription drugs said Tuesday that its net income was $2.97 billion, or $1.05 per share. That's down from $3.2 billion, of $1.15 per share, in 2011's third quarter.

Excluding one-time charges for research, the acquisition and litigation, earnings were $3.5 billion, or $1.25 per share.

Revenue rose 6.5 percent to $17.05 billion, boosted nearly 6 percent by sales from Synthes Inc., a maker of surgical trauma equipment and orthopedic implants that J&J bought for $19.7 billion in June.

The results beat Wall Street expectations for earnings of $1.21 per share on revenue of $17.01 billion.

J&J, based in New Brunswick, New Jersey, raised its full-year profit forecast and now expects earnings per share of $5.05 to $5.10, excluding one-time items. That's up from its July forecast of $5 to $5.07.

J&J's stock rose 83 cents to $69.43 in midday trading.

"Our third-quarter results reflected continued sales momentum driven by strong growth of key products, successful new product launches, and the addition of Synthes to our family of companies. We advanced our pipelines with regulatory approvals for a number of new products, the submission of several new drug applications and the completion of several strategic collaborations," CEO Alex Gorsky said in a statement.

Sales of medical devices and diagnostic equipment, which is J&J's biggest division and now includes the Synthes business, jumped 12.5 percent to $7.07 billion.

Prescription drug sales climbed 7 percent to $6.4 billion.

But sales of consumer health products fell 4.3 percent, to $3.58 billion. They continue to be weighed down by about 30 product recalls since September 2009. That's kept many of its nonprescription medicines off store shelves as J&J rebuilds one factory from the ground up and upgrades another under heavy scrutiny from the Food and Drug Administration.

J&J's U.S. sales rose 13 percent to $7.79 billion, while sales in other countries inched up 1.4 percent to $9.26 billion. The company noted that unfavorable currency exchange results reduced total revenue by 4.3 percent.

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Merck's 2Q net falls on charges, but sales rise

Jul 27, 2012

Merck & Co.'s second-quarter net income fell 11.4 percent as slightly higher sales were offset by acquisition and restructuring costs. However, the drugmaker beat Wall Street expectations, and Merck shares ...

Soft PC sales send Microsoft profit down 29 pct

Jul 23, 2009

(AP) -- Microsoft Corp. said Thursday its profit in the last quarter plunged 29 percent because of weak computer sales, ending a fiscal year in which the software maker's revenue fell for the first time since ...

Qualcomm 3Q results beat Wall Street estimates

Jul 20, 2011

(AP) -- Wireless chip-maker Qualcomm Inc.'s results for the latest quarter beat Wall Street's expectations, and its projections for the current quarter are also above analysts' estimates.

Oracle fiscal 3Q net income up 78 pct

Mar 24, 2011

(AP) -- Database software maker Oracle Corp. said Thursday its net income rose 78 percent in the fiscal third quarter, helped by a rise in new software license sales and the benefit of three full months of ...

Recommended for you

Exploring 3-D printing to make organs for transplants

Jul 30, 2014

Printing whole new organs for transplants sounds like something out of a sci-fi movie, but the real-life budding technology could one day make actual kidneys, livers, hearts and other organs for patients ...

High frequency of potential entrapment gaps in hospital beds

Jul 30, 2014

A survey of beds within a large teaching hospital in Ireland has shown than many of them did not comply with dimensional standards put in place to minimise the risk of entrapment. The report, published online in the journal ...

Key element of CPR missing from guidelines

Jul 29, 2014

Removing the head tilt/chin lift component of rescue breaths from the latest cardiopulmonary resuscitation (CPR) guidelines could be a mistake, according to Queen's University professor Anthony Ho.

User comments