NEW BRUNSWICK (dpa-AFX) - Johnson & Johnson (JNJ) eked out a small increase in first-quarter profit, excluding one-time items, but its domestic sales dropped over 5 percent due to generic competition for its blockbuster antibiotic Levaquin and manufacturing suspension at a supplier for breast cancer drug Doxil/Caelyx.
Adjusted earnings topped analysts' estimates, but the top line missed. Citing favorable currency, the health care giant lifted its adjusted earnings guidance for the full year.
The company's once-blockbuster antibiotic levofloxacin, marketed as Levaquin, had sales of over $1.5 billion in 2007. Since then, revenues have fallen dramatically and its patent expired in 2011. In the first quarter, the product generated a paltry $29 million in revenues, down 93.3 percent from last year.
Excluding special items, the company's first-quarter earnings rose 1.5 percent to $3.8 billion or $1.37 per share, beating the average estimate of 17 analysts polled by Thomson Reuters by two cents. Analysts' estimates typically exclude special items.
The company, which is replacing its CEO William Weldon with medical device unit head Alex Gorsky following a series of product recalls and lawsuits, said it had an acquisition-related gain of $106 million in the quarter as opposed to litigation and product recall charges of $271 million last year.
Net profit of $3.91 billion or $1.41 per share was 12.4 percent higher than prior year's $3.48 billion or $1.25 per share.
Sales edged down 0.2 percent to $16.14 billion, largely a result of negative currency impact, and missed analysts' estimate of $16.26 billion.
Domestic sales declined 5.1 percent. Manufacturing suspension due to clean-up efforts at certain plants, particularly the McNeil Consumer Healthcare facility in Fort Washington, Pa., which makes the U.S. over-the-counter medicines impacted production volumes.
International sales increased 4.1 percent, helped by strong results from inflammatory disease cure Remicade, multiple myeloma drug Velcade and sales of recently launched products. The Western Hemisphere excluding U.S. generated a 19.4 percent increase in sales.
Segment-wise, consumer sales fell 2.4 percent as both domestic and international markets failed to grow, while Pharmaceutical sales increased 1.2 percent as double-digit growth in overseas market more than offset poor results from the U.S.
Recently launched products such as prostate cancer drug Zytiga, plaque psoriasis drug Stelara, and hepatitis drug Incivo helped the results. 'We continue to bring meaningful innovations to our patients and customers through the strong performance of our recently launched products,' said William Weldon, Chairman and Chief Executive Officer.
The company's devices and diagnostics segment sales edged down 0.3 percent to $6.4 billion, impacted by lower sales in the cardiovascular care business, reflecting the company's mid-2011 decision to exit the drug eluting stent market.
Looking ahead, for fiscal 2012, Johnson & Johnson now expects adjusted earnings per share of $5.07 to $5.17 per share, higher than previous forecast of $5.05 to $5.15 per share, while analysts project earnings of $5.11 per share.
JNJ shares are currently trading at $63.70, down $0.28 or 0.44 percent.
Copyright RTT News/dpa-AFX
