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 â€” 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 â€” 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
Read more Business News
- Hwy. 33 crashCentral Okanagan - 10:25 am
- Property gets paint-balledPenticton / S. Okanagan - 10:22 am
- Thieves on the prowlPenticton / S. Okanagan - 10:29 am
- Flight 17 a possible war crimeWorld - 10:47 am
|QHR Technologies Inc||1.15||0.00|
|Anavex Life Sciences||0.265||-0.01|
|Copper Mountain Mining||2.97||+0.15|
|Sunrise Resources Ltd||0.02||-0.03|
|Mission Ready Services||0.19||+0.01|
Photo: Thinkstock.comWays to reduce your Debt:Make a budget and get budget counselingA basic first step for debt reduction is to prepare a budget and plan your spending. Once you have a budget, you mu...
The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...
The mainstream media are finally waking up to something unusual in British Columbia – a labour shortage. If the experience of Alberta is a guide to our own future, the highly skilled labour will...