Johnson & Johnson tops Q1 profit forecasts, but net dips
Johnson & Johnson’s firstquarter profit dipped due to slightly higher spending and a bigger tax bill, but the health care giant gave a rosier financial forecast for the year.
The world’s biggest maker of health care products cited its pending $30 billion purchase of biopharmaceutical company Actelion for the raised forecast. It also benefited from several smaller acquisitions and from the restructuring of its medical device segment, which started in early 2016.
The New Brunswick, New Jersey-based company yesterday reported net income of $4.42 billion, or $1.61 per share, down from $4.46 billion, or $1.59 per share, a year earlier.
Earnings, adjusted for one-time costs, came to $1.83 per share, topping Wall Street expectations for earnings of $1.77 per share. Revenue totaled $17.77 billion in the period, which missed Street forecasts for $18.01 billion. International sales jumped 2.8 percent to $8.4 billion, while US sales edged up 0.6 percent to $9.4 billion.
In an interview, Chief Financial Officer Dominic Caruso said revenue was crimped by slower growth in many consumer health product categories and by payers demanding bigger rebates off the prices of prescription drugs in categories with many competing medicines, particularly cardiovascular, diabetes and other primary care drugs.
“The diabetes market is very price sensitive, and (net) prices have been declining for some time,” Caruso noted. As a result, J&J is exploring the sale of its diabetes care businesses, which make test strips and insulin pumps, but will continue selling lucrative diabetes pill Invokana. —AP