Johnson & Johnson tops 1Q views on sales spike, but net dips

Much-higher spending and onetime charges offset a12.6 percent jump in health care giant Johnson & Johnson’s first-quarter revenue, trimming its profit by 1.2 percent, but the results still beat Wall Street expectations.

The maker of baby products, medical devices and blockbuster immune disorder drug Remicade on Tuesday reported revenue of $20.01 billion, topping analyst projections for $19.48 billion. Sales across J&J’s three business segments all posted healthy gains.

The New Brunswick, New Jersey, company earned net income of $4.37 billion, or $1.60 per share, down from $4.42 billion, or $1.61 per share, in 2017’s first quarter.

Excluding $1 billion in write-downs on the value of assets and $300 million in other one-time charges, adjusted income came to $5.64 billion, or $2.06, a nickel better than expected.

“The U.S. tax legislation passed late last year is creating the opportunity for us to invest more than $30 billion in (research and development) and capital investments in the U.S. over the next four years,” an increase of 15 percent, J&J Chief Executive Alex Gorsky said in a statement.

In the first quarter, J&J increased spending on research and development by 16 percent, while spending on production jumped 22 percent and spending on marketing and administration rose nearly 11 percent.

Marketing and production costs were higher partly because of the launch of its new severe psoriasis drug, Tremfya, approved last summer. The company also had another medicine, Erleada for prostate cancer, approved on Feb. 14.

Longtime Chief Financial Officer Dominic Caruso, who is retiring in July, noted that the company plans a major upgrade of its factories to reduce costs and accommodate advanced technology in some new products. He also said the company plans to seek approval of eight new products with potential annual sales of $1 billion or more apiece in the next few years.

“Overall, I think we’re in great shape,” Caruso said.