You are here
Johnson & Johnson profit beat fueled by strength in pharma business
[BENGALURU] Johnson & Johnson topped analysts' estimates for quarterly profit and revenue on Tuesday, as strong demand for cancer drugs Zytiga and Darzalex more than made up for declining sales of blockbuster treatment Remicade.
Shares of the US healthcare giant, which also trimmed its full-year sales forecast, were volatile in premarket trading. After initially slipping, they recovered to trade marginally up at US$125.80.
Sales in pharmaceuticals, the company's biggest unit, surged nearly 20 per cent to US$10.35 billion in the second quarter, as the company focuses on its better performing unit while selling-off some businesses such as diabetes care devices.
The company's multiple myeloma drug, Darzalex, had sales of US$511 million, above analysts' consensus estimate of US$453 million. Prostate cancer drug Zytiga sales came in at US$909 million, above the consensus of US$794 million, according to Jefferies.
But the company, whose products range from band-aids to cancer medicines and joint replacement devices, remained under pressure from falling sales of its blockbuster rheumatoid arthritis drug, Remicade, which faces competition from cheaper copies.
Sales of the drug fell 13.7 per cent drop in the latest reported quarter, after sliding 16.9 per cent in the first quarter.
J&J has vowed to appeal a Missouri jury verdict that earlier this month ordered the company to pay a record US$4.69 billion to 22 women, who had claimed their cancer was caused by J&J talc products.
Net earnings rose to US$3.95 billion, or US$1.45 per share, in the second quarter, from US$3.83 billion, or US$1.40 per share, a year earlier.
Excluding items, the company reported a profit of US$2.10 per share, beating analysts' average estimate of US$2.07.
Total sales rose to US$20.83 billion from US$18.84 billion a year ago, above analysts' estimates of US$20.39 billion.
The healthcare conglomerate said it expects full-year sales of $80.5 billion to $81.3 billion, compared with a prior estimate of US$81.0 billion to US$81.8 billion. The company cited a strengthening dollar for the trim.
"This (foreign exchange) was a key driver of the company lowering FY sales guidance and sets a potentially cautious tone for earnings season for the US Pharma space, especially those with greater ex-US exposure," Credit Suisse's Vamil Divan said.
International revenue for J&J rose 11.8 per cent in the reported quarter, and accounted for nearly half of its total sales. J&J said it now expects adjusted earnings of US$8.07 to US$8.17 per share, compared with an earlier forecast of US$8.00-US$8.20 per share.