J&J Quarterly Profit Declines After Restructuring (Update3)
January 26, 2010, 4:07 PM EST(Updates shares in sixth paragraph.)
By Meg Tirrell
Jan. 26 (Bloomberg) -- Johnson & Johnson, the world’s largest health products company, reported a decline in fourth- quarter profit, hurt by restructuring costs. Adjusted income topped analysts’ estimates.
Net income fell to $2.21 billion, or 79 cents a share, from $2.71 billion, or 97 cents, a year earlier, the New Brunswick, New Jersey-based company said today. Profit excluding one-time items was $1.02, beating by 5 cents the average estimate of 15 analysts surveyed by Bloomberg.
J&J said on Nov. 3 it would trim its 117,000-member workforce by 6 percent to 7 percent as top-selling medicines Risperdal and Topamax face competition from cheaper generic medicines. In the fourth quarter, as revenue from drugs, devices and consumer products rose, the company reported restructuring expenses of $1.07 billion.
“They had great results,” said Jeff Jonas, an analyst with Gabelli & Co. in Rye, New York, in an interview today. “Pharmaceuticals were the most surprising -- the fact that they returned the growth in this quarter was basically two quarters ahead of what I was expecting.”
The company forecast 2010 earnings of $4.85 to $4.95 a share, excluding the impact of special items. Seventeen analysts surveyed by Bloomberg projected $4.93 a share, on average, with a range of $4.85 to $5.03.
J&J Shares
J&J shares fell 43 cents, or less than a percent, to $62.79 at 4 p.m. in New York Stock Exchange composite trading. The stock is up 11 percent in the last 12 months.
Fourth-quarter sales rose 9 percent to $16.6 billion, topping the average $15.8 billion estimate of 13 analysts surveyed by Bloomberg.
“Sales beat our expectations across all three divisions,” Leerink Swann analyst Rick Wise said in a research note today. “But an extra selling week was the primary driver of outperformance.”
Pharmaceutical revenue worldwide rose 5.4 percent to $6 billion. Revenue from J&J’s top-selling drug, the anti- inflammatory Remicade, rose 28 percent to $1.14 billion. Sales of Concerta, for attention-deficit disorder, rose 36 percent to $381 million.
Sales of the antipsychotic Risperdal, a former top-seller now contending with generic copies, declined 32 percent to $193 million, while revenue from anti-seizure medicine Topamax, also facing generic competition, plunged 72 percent to $192 million.
Listerine and Neutrogena
Global consumer product sales, which include Listerine mouthwash and Neutrogena skin-care, rose 10 percent to $4.25 billion, boosted by wound products, women’s health and skin care items. All units in the division increased in the quarter.
Device revenue rose 12 percent to $6.31 billion, led by Ethicon, a surgical tool business. Sales for the DePuy unit, maker of artificial hips and knees, rose 14 percent to $1.47 billion, while revenue for the Ethicon unit increased 21 percent to $1.12 billion.
--Editors: Lisa Rapaport, Bruce Rule
To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net.
To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.
