Johnson & Johnson defeat Wall Street's quarterly revenue estimates on sharply reduced taxes, strong product sales of prescription drugs and also a revival of over-the-counter medications that had been recalled more than quality handle problems. Newer prescription remedies, which include prostatic cancer drug Zytiga, psoriasis drug Stelara, and also Incivo for hepatitis C created large contributions. J&J shares rose 1.7% for $83.13 within mid-day investing.
"Overall, the company's first-quarter performance was clearly a positive, with pharmaceuticals firing on all cylinders and more than making up for disappointment with medical devices," said Edward Jones analyst Judson Clark. He was also optimistic that over-the-counter medicines would continue to regain lost ground this year. U.S. sales of over-the-counter (OTC) medicines, including painkillers Tylenol and Motrin, jumped 14 percent, allowing the broader consumer products business to eke out a 2.4 percent sales gain in the quarter. "It's a strong start to the year that increases the chances that J&J will meet its 2013 profit forecast," Morningstar analyst Damien Conover said. Sales at the OTC division had plunged over the last three years after J&J recalled products made at plants in Pennsylvania and Puerto Rico that were shown to have foreign particles or incorrect concentrations of active ingredients. Although costly plant upgrades were still underway, Conover noted other factories have geared up production of Tylenol, Motrin and other OTC products in the meantime, allowing J&J to restock drugstore shelves. Chief Financial Officer Dominic Caruso said on a conference call with analysts that a "strong flu season" bolstered sales of OTC products. He predicted 75 percent of recalled OTC brands would be back on the U.S. market by the end of 2013. MEDICAL DEVICES DISAPPOINT J&J earned $3.5 billion (2.3 billion dollars) , or $1.22 per share, compared with $3.91 billion, or $1.41 per share, in the year-earlier quarter. Excluding special items, including litigation expenses of $529 million, J&J earned $1.44 per share. Analysts, on average, expected $1.40 per share, according to Thomson Reuters I/B/E/S. Global company sales rose 8.5 percent to $17.50 billion, slightly higher than the $17.42 billion expected by Wall Street. They would have risen by 9.8 percent, if not for the stronger dollar, which hurts the value of sales in overseas markets. Prescription drugs sales rose 10.4 percent to $6.77 billion. Stelara sales leapt 57 percent to $346 million, while Incivo's rose 23 percent to $162 million. Sales of Zytiga jumped 72 percent to $344 million. Global income of health devices rose 10.2% for $7.06 billion, assisted by the addition of fresh trauma-treating items from its current acquisition of Synthes Inc. Rick Wise, an analyzer at Stifel Nicolaus, have predicted a 16% improve in the sales, and also attributed the deficiency to fewer basic and orthopedic treatments being performed. "J&J claimed procedure quantities were soft, and they may not anticipating much of a restoration this year," stated Wise, who also noted that numerous clients were delaying treatments because of bigger insurance deductibles. He stated the trend cited by J&J appeared to be hitting shares of competitor device producers. Stryker Corp fell 0.5% to $64.98, while Zimmer Holdings Inc ended up 0.3% for $73.48. J&J trapped to its earlier full-year 2013 revenue forecast for $5.35 to $5.45 per share. It purchased $5.10 per share previous year. |
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