J&J's Profits Fall Amid Stronger Dollar

By Tess Stynes 

Johnson & Johnson (JNJ) reported an 8.6% decline in first-quarter profit and reduced its 2015 per-share earnings outlook amid increased pressure from a strong U.S. dollar and weaker sales of hepatitis C drug Olysio.

The health-care giant's shares, down 3.3% over the pasty three months, rose 0.2% to $100.70 in recent premarket trading.

For the year, J&J lowered its per-share earnings estimate to a range of $6.04 to $6.19, citing further negative effects from currency movements, below its previous estimate for per-share profit of $6.12 to $6.27.

The New Brunswick, N.J., company said foreign-exchange rates had a negative impact of 7.2%, compared with a negative impact of 4.5% during the fourth quarter.

J&J last month lost out to AbbVie Inc. in the pursuit of drug maker Pharmacyclics Inc., with which J&J co-markets the cancer drug Imbruvica. While J&J was unsuccessful, the company's involvement signals that it is open to using its huge cash pile to pursue deals, so investors likely will be watching for information about executives' merger-and-acquisitions strategies on the conference call.

J&J also has been aiming to shed slower-growth businesses such as its sale of its Ortho-Clinical Diagnostics unit last year and the pending divestiture of its Cordis heart-products business.

The company's sales have been driven by newer drugs such as diabetes drug Invokana, blood-thinner Xarelto and psoriasis treatment Stelara. However, J&J faces the threat of increased competition in the U.S. from lower priced biosimilar versions of its blockbuster anti-inflammatory drug Remicade.

Olysio sales, meanwhile, reached $98 million in the U.S., above--below the $291 million reported a year earlier and $256 million in the fourth quarter. Hepatitis C drug Olysio was a big sales driver for J&J last year, but the company has been expecting the drug's sales to drop off as the result of growing competition.

Overall, J&J reported a profit of $4.32 billion, or $1.53 a share, down from $4.73 billion, or $1.64 a share, a year earlier. Excluding certain items, per-share earnings were $1.56 in the latest quarter.

Revenue decreased 4.1% to $17.37 billion.

Analysts polled by Thomson Reuters expected per-share profit of $1.54 and revenue of $17.31 billion.

Write to Tess Stynes at [e-mail]

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