Johnson & Johnson's 4Q profit rises 19 percent

by Linda A. Johnson
In this Tuesday, July 30, 2013, photo, large banners hang in an atrium at the headquarters of Johnson & Johnson in New Brunswick, N.J. Johnson & Johnson reports quarterly financial results before the market opens on Tuesday, Jan. 21, 2014. (AP Photo/Mel Evans)

Surging sales of Johnson & Johnson's prescription medicines and the rebound of its recall-plagued consumer health business lifted fourth-quarter profit 19 percent.

The health care giant also enjoyed a $707 million tax benefit from writing off money-losing subsidiary Scios.

However, shares fell on J&J's less-stellar 2014 profit forecast due to factors including continued pressures for lower prices.

The maker of baby shampoo and biological drugs said Tuesday that fourth-quarter net income was $3.52 billion, or $1.23 per share, up from $2.57 billion, or 91 cents per share, a year earlier.

Excluding one-time items, income was $1.24 per share. Analysts expected 4 cents less.

Revenue totaled $18.36 billion, up 4.5 percent. Analysts expected $17.94 billion, according to FactSet.

"Each of Johnson & Johnson's three main business units reported better sales than investors were expecting ... despite a negative impact due to currency (rates) of over 3 percent," noted Edward Jones analyst Judson Clark.

CEO Alex Gorsky noted J&J got three new medicines approved last year—Invokana for Type 2 diabetes, Olysio for hepatitis C and Imbruvica for lymphoma. It expects to apply for approval of 10 more by 2017.

Prescription drug sales rose 12 percent to $7.3 billion, led by higher sales of immune disorder drugs, plus Zytiga for prostate cancer and HIV drug Prezista.

Consumer product sales rose 2.8 percent to $3.75 billion. About 75 percent of J&J's consumer medicines, including pain relievers Tylenol and Motrin, are now back in stores.

They'd been off store shelves for a few years amid dozens of product recalls since 2009. J&J is under increased scrutiny from regulators over quality deficiencies and had to rebuild a key factory that hasn't reopened yet.

Sales of medical devices and diagnostics dipped 1 percent to $7.31 billion. J&J expects to close the sale of its Ortho-Clinical Diagnostics business to private equity firm Carlyle Group for $4.15 billion by June.

For 2013, J&J reported net income of $13.83 billion, up 27 percent, and earnings per share of $4.81. Sales totaled $71.31 billion, up 6.1 percent.

Analyst Steve Brozak of WBB Securities warned J&J can't sustain the growth of its high-profit prescription drug business—because insurers and patients can't afford ever-higher prices for newer drugs, which often cost over $20,000 a year.

In afternoon trading, J&J shares were down 1.81 at $93.25.

The New Brunswick, New Jersey, company forecast 2014 earnings per share of $5.75 to $5.85. Analysts expected $5.86.

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

Related Stories

J&J 2Q profit jumps on higher sales, lower charges

Jul 16, 2013

Health care giant Johnson & Johnson's second-quarter profit more than doubled, thanks to higher sales of medicines and medical devices as it recovers from recalls and manufacturing problems that cut into ...

Intel 4Q net income rises 6 pct (Update)

Jan 16, 2014

Intel's fourth-quarter net income rose 6 percent, as the company offset flat demand for its personal computer chips with higher sales of other products.

J&J 3Q net rises slightly on higher medicine sales

Oct 15, 2013

A big jump in prescription drug sales and continued recovery of Johnson & Johnson's beleaguered consumer health business in the third quarter helped the health care giant overcome a new problem: slumping sales of its medical ...

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

Oct 16, 2012

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.

Recommended for you

Mirabegron for overactive bladder: Added benefit not proven

4 hours ago

Mirabegron (trade name: Betmiga) has been approved since December 2012 for the treatment of adults with overactive bladder. In an early benefit assessment pursuant to the Act on the Reform of the Market for Medicinal Products ...

Novartis Japan admits concealing drug side effects

Sep 01, 2014

The Japanese unit of Swiss pharma giant Novartis has admitted it did not report more than 2,500 cases of serious side effects in patients using its leukaemia and other cancer drugs, reportedly including some fatalities.

Most US babies get their vaccines, CDC says

Aug 28, 2014

(HealthDay)—The vast majority of American babies are getting the vaccines they need to protect them from serious illnesses, federal health officials said Thursday.

User comments