Higher prescription-drug sales aid Johnson & Johnson results
Sales in the pharmaceuticals division in the U.S. rose 4.1% in the first quarter
Higher prescription-drug sales helped Johnson & Johnson offset softness in its consumerproducts and medical-device businesses and report betterthan-expected first-quarter sales and earnings, while slightly boosting its forecast of fullyear sales. J&J shares rose 2.5% to $139.88 (U.S.) on the report, as the stock continued to rebound from a sharp selloff in late 2018 triggered by fresh concerns about liability in litigation over the safety of Johnson’s Baby Powder and other talc-containing products.
“We are much more confident at this point in the year than maybe we were a year ago,” J&J CFO Joseph Wolk told analysts on a conference call, referring to the financial forecast.
Analysts said the quarterly results and updated full-year forecast show J&J is navigating through its challenges, which also include competition from lower-cost generic drugs. “To us, the good far outweighs any possible questions or concerns investors could have on the quarterly performance,” SVB Leerink analyst Danielle Antalffy said in a research note.
J&J’s world-wide pharmaceutical sales rose 4.1% to $10.24 billion, fueled by gains for antiinflammatory drug Stelara and cancer treatment Darzalex. Competition from generic drugs hurt sales of arthritis treatment Remicade and cancer drug Zytiga.
J&J’s second-biggest business by sales, medical devices, posted a sales decline of 4.6% to $6.46 billion. Excluding divestitures, acquisitions and currency effects, J&J said sales grew 4.3%, helped by sales of cardiology devices and contact lenses.
Global sales of J&J’s consumer products, which include brands such as Band-Aid and Tylenol, dropped 2.4% to $3.32 billion. J&J said “broad market softness” affected results, including a soft cold-and-flu season in Russia and Western Europe, which hurt sales of certain over-the-counter drugs.
Sales of J&J’s baby-care products dropped 14% globally, which J&J attributed partly to inventory changes related to launching new versions of products outside the U.S. J&J rolled out the new versions in the U.S. last year.
J&J didn’t break out sales of its talc-containing powders. At least 13,000 lawsuits against the company allege that use of Johnson’s Baby Powder and other talc products caused ovarian cancer and mesothelioma.
J&J didn’t discuss the lawsuits in its earnings release or on a conference call with analysts.
It says decades of testing have shown its baby powder is safe and asbestos-free, and that it doesn’t cause cancer. The U.S. Justice Department and the Securities and Exchange Commission have issued subpoenas seeking documents related to talc safety.
The New Brunswick, N.J.,based company anticipates adjusted earnings this year to be between $8.53 to $8.63 per share, narrowed from its prior forecast of $8.50 to $8.65 a share. It expects operational sales, excluding currency impact, to be between $82 billion and $82.8 billion, up from $81.6 billion to $82.4 billion as previously targeted.
Overall, sales rose 0.1% to $20.02 billion, ahead of analysts’ expectations. J&J’s profit fell14% from the year-ago quarter to $3.75 billion, or $1.39 a share. Excluding various items, J&J earned $2.10 a share, topping expectations.