Johnson & Johnson Reports Meager 1% Growth in 3rd Quarter
Tue, 10/13/2009 - 5:08am
LINDA A. JOHNSON AP Business Writer TRENTON, N.J. (AP) — Health care giant Johnson & Johnson on Tuesday reported a meager 1 percent increase in its third-quarter net income, as generic competition slashed sales of several of its top drugs and the recession hurt consumer product sales. The maker of Band-Aids, biotech drugs and Acuvue contact lenses said it earned $3.35 billion in the quarter, or $1.20 per share. In last year's third quarter, it had net income of $3.31 billion, or $1.17 per share. Analysts polled by Thomson Financial were expecting lower earnings per share, at $1.13, and revenue of $15.19 billion in the latest quarter. J&J just missed the revenue forecast, reporting total sales of $15.08 billion. That's down 5 percent from a year ago. However, the company raised its earnings forecast for all of 2009 to a range of $4.54 to $4.59 per share. The previous forecast was $4.45 to $4.55 per share. Analysts are expecting $4.52 per share, on average. Sales in Johnson & Johnson's biggest division, medical devices and diagnostics, rose 2.3 percent to $5.84 billion. Pharmaceutical sales, which had been the top-selling division, suffered a 14.1 percent drop in sales, to $5.25 billion from $6.1 billion, as U.S. sales plunged 19 percent. J&J cited a $680 million decrease in the combined sales of two blockbusters with recent generic competition: epilepsy drug Topamax, which had a 76 percent drop in sales, and the short-acting version of antipsychotic drug Risperdal, which was down 40 percent. However, several other drugs also saw a double-digit drops in sales due to generic competition or other factors, including attention deficit disorder pill Concerta, painkiller Duragesic, anemia treatment Procrit and Alzheimer's drug Razadyne. Only a few drugs showed sales growth, including Remicade for rheumatoid arthritis and other immune disorders, up 6 percent to $1 billion, and the long-acting version of Risperdal. The consumer products division posted a 2.7 percent drop in sales, to $3.99 billion. "We continue to successfully manage our broad base of businesses and deliver solid earnings despite the impact of patent expirations and the challenges posed by the current economic environment," Chief Executive William Weldon said in a statement. "We completed multiple acquisitions and strategic collaborations and receive several new product approvals in the quarter that will benefit patients worldwide and drive future growth." Among the key deals in the last quarter, J&J jumped into the vaccine business by paying $440 million for a stake in Dutch biotechnology company Crucell NV, which is developing an antibody-based vaccine and a drug that would target all types of influenza. J&J also invested nearly $1.4 billion in Irish biotech company Elan Corp., which it will help to develop two experimental drugs for Alzheimer's disease and a vaccine to prevent it. For the first nine months of the year, net income fell 2 percent to $10.06 billion, or $3.61 per share, from $10.24 billion, or $3.60 per share, in the same period in 2008. Revenue fell nearly 7 percent to $45.35 billion from $48.57 billion.