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Johnson & Johnson profit rises 17 percent

Diversified health-care products maker Johnson & Johnson Inc. said Tuesday first-quarter profit rose 17 percent because of an acquisition termination fee from Guidant Corp., but sales fell short of Wall Street estimates.
/ Source: The Associated Press

Johnson & Johnson’s first-quarter profit jumped 17 percent, mainly due to a big termination fee from its failed attempt to acquire heart device maker Guidant Corp., while revenues were hurt by exchange rates and generic competition to some former blockbuster drugs.

The world’s most diversified health products maker on Tuesday reported net income grew to $3.31 billion, or $1.10 per share, from $2.84 billion, or 94 cents per share, a year ago.

The results included a termination fee, worth $622 million, or 12 cents per share, paid by Indianapolis-based Guidant after it accepted Boston Scientific Corp.’s takeover bid instead of J&J’s earlier in the quarter.

Excluding that fee and a 1 cent-per-share charge for two acquisitions, Johnson & Johnson’s income would have been $2.97 billion, or 99 cents per share, for the latest quarter. That beat by a penny the consensus forecast of analysts surveyed by Thomson Financial.

J&J, which makes everything from contact lenses and contraceptives to baby shampoo and skincare products, said revenue rose 1 percent to $12.99 billion from $12.83 billion last year. Analysts had been expecting sales of $13.2 billion.

Generic competition reduced sales of drugs including anti-fungal medicine Sporanox, painkiller Ultracet and Duragesic, a skin patch for chronic pain.

Chief financial officer Robert J. Daretta said despite continuing pressures from generics and currency fluctuations, results should pick up, forecasting operational growth of about 8 percent for the next three quarters.

“We very much are looking forward to a year of accelerating growth on both the top and bottom line,” Daretta told analysts during a conference call.

He repeated an earlier forecast of earnings per share from $3.65 to $3.72 for 2006.

J&J’s biggest division, pharmaceuticals, saw revenues dip 2.2 percent both in the United States and overall, partly due to unfavorable currency exchange rates that dragged down international revenue 5.3 percent.

Pharmaceutical revenue totaled $5.63 billion, down from $5.76 billion a year ago, led by rising sales for schizophrenia drug Risperdal, epilepsy treatment Topamax, Concerta for attention deficit hyperactivity disorder and Remicade for rheumatoid arthritis and other immune disorders.

Revenue in the medical devices and diagnostic segment grew 4.5 percent to $5 billion as growing sales of the company’s popular Cypher stent, for propping open heart arteries, boosted results for the Cordis business by 11 percent, to $1.08 billion.

The smallest division, consumer products, posted a 3.3 percent jump in revenue, to $2.36 billion, led by strong sales of Aveeno, Neutrogena and other skincare products.