Johnson & Johnson Lifts FY14 Earnings Forecast As Q1 Results Top Estimates

(RTTNews) - Healthcare giant Johnson & Johnson Co. (JNJ) reported Tuesday a 35.2 percent climb in first-quarter profit, boosted mainly by a gain, the absence of prior year's charge as well as strong sales growth in both regions. Adjusted earnings per share and top line beat market estimates. Further, the company lifted its forecast for fiscal 2014 earnings.

In pre-market activity, Johnson & Johnson shares gained $1.59 or 1.64 percent, and traded at $98.73.

Alex Gorsky, chairman and chief executive officer, said, "Johnson & Johnson delivered strong first-quarter results driven by successful new product launches and the continued growth of key products... We also advanced our near-term priorities and long-term growth drivers, positioning us well to deliver sustainable results."

For the first quarter of 2014, net earnings increased 35.2 percent to $4.73 billion from $3.50 billion last year. Earnings per share grew 34.4 percent to $1.64 from $1.22 a year ago. The latest-quarter results included a net gain of approximately $0.3 billion mainly related to a tax benefit associated with Conor Medsystems. The prior year results were hurt by a net charge of approximately $0.6 billion.

Adjusted net earnings were $4.43 billion or $1.54 per share, compared to $4.11 billion or $1.44 per share in the prior year. On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $1.48 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly sales were $18.12 billion, an increase of 3.5 percent from $17.51 billion last year. Thirteen analysts estimated revenues of $18 billion for the quarter. Operational results increased 5.3 percent, while the negative impact of currency was 1.8 percent.

In the quarter, domestic sales increased 2.2 percent from last year to $8.20 billion. International sales increased 4.5 percent to $9.91 billion, reflecting operational growth of 7.9 percent, despite a negative currency impact of 3.4 percent.

Worldwide Consumer sales dropped 3.2 percent with a decline in both regions. Domestic sales were hurt by the divestiture of the sanitary protection business, while International sales were hurt by negative currency impact.

Pharmaceutical sales, however, grew 10.8 percent to $7.5 billion, driven by strong growth in both domestic and international regions. The strong sales results of new products include chronic hepatitis C drug Olysio/Sovriad, metastatic, castration-resistant prostate cancer drug Zytiga , oral anticoagulant Xarelto and type 2 diabetes drug Invokana.

Meanwhile, sales results were negatively impacted by loss of exclusivity for Aciphex, a proton pump inhibitor for gastrointestinal disorders and Concerta for the treatment of attention deficit hyperactivity disorder.

Medical Devices and Diagnostics sales were flat as an operational increase of 1.8 percent were offset by a negative currency impact of 1.8 percent.

Further, the company said it now expects fiscal 2014 earnings in a range of $5.80 to $5.90 per share, excluding the impact of special items. The company said in January that it expected adjusted earnings to be in a range of $5.75 to $5.85 per share for full-year 2014. Analysts project annual earnings per share of $5.83.