J&J Again Buoyed by Pharmaceuticals

Johnson & Johnson lifted the low end of its guidance and posted better-than-anticipated results in the latest quarter as the health-care giant's pharmaceutical business continues to buoy its top line.

The New Brunswick, N.J., company now expects earnings for the year of $6.68 to $6.73 a share, compared with its previous guidance for $6.63 on the bottom. It backed its revenue forecast of $71.5 billion to $72.2 billion.

Chief Executive Alex Gorsky said results reflect the success of new product launches and the strength of core businesses, "driven by strong growth in our pharmaceuticals business."

Shares, which have risen 15% so far this year, edged 0.9% higher premarket to $119.59.

"With a number of regulatory approvals, several new drug application submissions and new breakthrough therapy designations from the FDA, we are increasingly confident in our pipeline expectation of filing 10 new pharmaceutical products between 2015 and 2019, each with revenue potential over $1 billion," he said.

Still, J&J faces the threat of lower-priced competition emerging for some top-selling prescription drugs. And with about half of its sales overseas, J&J's results have been pressured by a strengthening U.S. dollar and weakness in some emerging markets.

J&J's pharmaceutical business, the company's largest, continued to propel the company. Prescription-drug sales grew 9.2% to $8.4 billion, driven by strength in new products including blood-cancer drug Imbruvica, blood thinner Xarelto and multiple myeloma drug Darzalex.

J&J other segments, however, continued to lag. During the quarter, sales of J&J consumer health products slipped 1.6% to $3.26 billion, dragged by currency challenges.

Meanwhile, J&J's medical device sales rose just 1.1% to $6.16 billion. The business used to be J&J's largest, but has stumbled amid pricing pressures, increased competition and market changes. In response, J&J has exited certain areas, rejiggered how it sells devices and focused on high-growth categories like robotics and staplers.

In all for the September quarter, J&J posted a profit of $4.27 billion, or $1.53 a share, up from $3.36 billion, or $1.20 a share, in the same period a year ago.

Excluding certain items, adjusted earnings ticked up to $1.68 a share. Analysts polled by Thomson Reuters were looking for an adjusted $1.66 a share. Revenue climbed 4.2% to $17.8 billion, edging in just above analyst estimates for $17.74 billion. Unfavorable currency rates shaved 0.1% off the quarter's total.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

October 18, 2016 07:55 ET (11:55 GMT)

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