Johnson & Johnson Raises Guidance

Johnson & Johnson on Tuesday raised its guidance for the year again as the health-care giant topped expectations in the latest quarter, helped by growth in its pharmaceutical business.

The New Brunswick, N.J., company now expects earnings for the year of $6.63 to $6.73 a share, up from previous guidance for $6.53 to $6.68 a share. It also raised its revenue forecast to a range from $71.5 billion to $72.2 billion, up from $71.2 billion to $71.9 billion.

With about half of its sales overseas, J&J's results have been pressured lately by a strengthening U.S. dollar and weakness in some emerging markets. But Chief Executive Alex Gorsky pointed to "strong underlying growth" across the company, noting the continued success of new products.

J&J's pharmaceutical business, the company's largest, grew 8.9% to $8.65 billion, lifted by a 13.2% increase in U.S. pharmaceutical sales. The company highlighted strong growth in new products, including blood-cancer drug Imbruvica, blood thinner Xarelto, multiple myeloma drug Darzalex, Type 2 diabetes treatments Invokana and Invokamet, and prostate cancer drug Zytiga. Sales of hepatitis C drug Olysio, which has been outflanked by newer drugs, continued to slow.

Other J&J businesses, however, didn't perform as well.

In the second quarter, sales of J&J consumer health products slipped 1.8% to $3.42 billion, largely due to Venezuela's devaluation of its currency. The consumer business has been recovering from supply-chain problems that led to recalls.

J&J's medical device sales, meanwhile, edged a 0.8% increase to $6.41 billion, which represents about 35% of the company's revenue.

The medical-device business used to be J&J's largest, but it 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 January, J&J announced plans to cut about 3,000 jobs in its medical-devices division, or about 2.5% of the company's total workforce.

In all for the quarter ended June, earnings fell to $3.99 billion, or $1.43 a share, from $4.52 billion, or $1.61 a share, in the same period last year. Excluding certain items, adjusted earnings rose to $1.74 a share. Revenue ticked up 3.9% to $18.5 billion. Unfavorable currency rates shaved 1.4% off the latest quarter's total.

Analysts had projected earnings of $1.68 a share on $17.97 billion in revenue, according to Thomson Reuters.

Shares, inactive premarket, have risen 20% this year.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

July 19, 2016 07:55 ET (11:55 GMT)

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