Health care products maker Johnson & Johnson said Tuesday its first-quarter profit fell 22 percent as a big charge for an acquisition offset record sales.
The New Brunswick-based maker of contraceptives, contact lenses, prescription drugs and baby products reported net income of $2.57 billion, or 88 cents per share, down from $3.31 billion, or $1.10 per share, in the first quarter of 2006.
Excluding a charge of $807 million related to the acquisition of Conor Medsystems, J&J said net income was $1.16 per share. In the year-ago quarter, results were also boosted by an after-tax gain of $368 million from the breakup fee J&J received after medical device maker Guidant Corp. backed out of an acquisition agreement and instead was purchased by Boston Scientific Corp.
Analysts surveyed by Thomson Financial had expected earnings per share of $1.05 and sales of $14.44 billion.
Sales totaled $15.04 billion, up nearly 16 percent from $12.99 billion a year earlier. Operational sales growth, which excludes the impact of new products and currency exchange rates, was 6.3 percent.
Revenues from the medical devices and diagnostics division edged up 6.2 percent to $5.32 billion, hurt by a 14 percent slide at Cordis, J&J’s cardiovascular device business. Sales of Cordis’ drug-coated stents, tiny metal scaffolds that prop open arteries and slowly release medicine, were problematic, Chief Financial Officer Dominic Caruso told analysts during a conference call. He was referring to new concerns about the safety and effectiveness of J&J’s Cypher and other drug-coated stents.
Sales of prescription drugs, J&J’s biggest business segment, rose 10.6 percent to $6.22 billion, led by strong sales of epilepsy treatment Topamax, anti-infective drug Levaquin and anti-psychotic drugs including Risperdal.
Consumer product sales jumped 48.5 percent, to $3.49 billion, fueled by J&J’s acquisition late last year of rival Pfizer Inc.’s consumer health business, including iconic products such as Listerine, Visine, Neosporin and Bengay. Without the additional products, operational growth for the division would have been only 6.7 percent, as strong sales of Tylenol respiratory medicines, Aveeno and other skincare lines, and nutritional products were offset by weak sales of pain relievers, the company said.