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
- DPA street party and night marketPenticton / S. Okanagan
- RDCO Diesel Spill UpdateKelowna
- Challenge pro field heats upPenticton / S. Okanagan
- Knox, Dilworth parks reopenKelowna
|QHR Technologies Inc||1.20||-0.01|
|Anavex Life Sciences||0.265||+0.005|
|Copper Mountain Mining||2.99||+0.11|
|Sunrise Resources Ltd||0.025||-0.005|
|Mission Ready Services||0.26||+0.045|
There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...
Photo: ContributedI would call it a joy ride... You see a planned project or business has a destination. It may be an ongoing revenue stream, it may be a business value or an exit strategy. If you don...
Establishing a joint account may seem like a great strategy at first glance. However, there are many factors that must be considered before taking this action. This article will explore the use of &ls...