Tuesday, October 13th12.1°C

Johnson & Johnson's 4Q profit jumps 19 per cent on higher prescription drug sales, tax benefit

Surging sales of Johnson & Johnson's prescription medicines and the rebound of its recall-plagued consumer health business lifted fourth-quarter profit 19 per cent.

The health care giant also enjoyed a $707 million tax benefit from writing off money-losing subsidiary Scios.

However, shares fell on J&J's less-stellar 2014 profit forecast due to factors including continued pressures for lower prices.

The maker of baby shampoo and biological drugs said Tuesday that fourth-quarter net income was $3.52 billion, or $1.23 per share, up from $2.57 billion, or 91 cents per share, a year earlier.

Excluding one-time items, income was $1.24 per share. Analysts expected 4 cents less.

Revenue totalled $18.36 billion, up 4.5 per cent. Analysts expected $17.94 billion, according to FactSet.

"Each of Johnson & Johnson's three main business units reported better sales than investors were expecting ... despite a negative impact due to currency (rates) of over 3 per cent," noted Edward Jones analyst Judson Clark.

CEO Alex Gorsky noted J&J got three new medicines approved last year — Invokana for Type 2 diabetes, Olysio for hepatitis C and Imbruvica for lymphoma. It expects to apply for approval of 10 more by 2017.

Prescription drug sales rose 12 per cent to $7.3 billion, led by higher sales of immune disorder drugs, plus Zytiga for prostate cancer and HIV drug Prezista.

Consumer product sales rose 2.8 per cent to $3.75 billion. About 75 per cent of J&J's consumer medicines, including pain relievers Tylenol and Motrin, are now back in stores.

They'd been off store shelves for a few years amid dozens of product recalls since 2009. J&J is under increased scrutiny from regulators over quality deficiencies and had to rebuild a key factory that hasn't reopened yet.

Sales of medical devices and diagnostics dipped 1 per cent to $7.31 billion. J&J expects to close the sale of its Ortho-Clinical Diagnostics business to private equity firm Carlyle Group for $4.15 billion by June.

For 2013, J&J reported net income of $13.83 billion, up 27 per cent, and earnings per share of $4.81. Sales totalled $71.31 billion, up 6.1 per cent.

Analyst Steve Brozak of WBB Securities warned J&J can't sustain the growth of its high-profit prescription drug business — because insurers and patients can't afford ever-higher prices for newer drugs, which often cost over $20,000 a year.

The New Brunswick, N.J., company forecast 2014 earnings per share of $5.75 to $5.85. Analysts expected $5.86.

J&J shares closed down $1.03 at $94.03.


Follow Linda A. Johnson at http://twitter.com/LindaJ_onPharma

The Canadian Press

Read more Business News

Recent Trending

Today's Market
S&P TSX13867.92-96.44
S&P CDNX555.21+2.95
S&P 5002009.79-7.67
CDN Dollar0.7691+0.0001
Natural Gas2.504-0.031

Okanagan Companies
Pacific Safety0.215-0.010
QHR Technologies Inc1.22-0.03
Metalex Ventures0.07+0.02
Russel Metals20.96-0.30
Copper Mountain Mining0.60-0.06
Colorado Resources0.07+0.00
ReliaBrand Inc0.022-0.002
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.075-0.005
Decisive Dividend Corp3.25+0.14
Diamcor Mining1.00+0.03


2232466470 Okaview Road
5 bedrooms 4 baths
more details
Click here to feature your property
Please wait... loading

Income for life?

Photo: Thinkstock.comIn almost every conversation I have with clients these days, the topic swings to interest rates. What direction they’re going, how long will they stay where they are and how...

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...




Member of BC Press Council