Johnson & Johnson Q1 Adj. Profit Tops View; Lifts FY16 Outlook

(RTTNews) - Johnson & Johnson (JNJ) reported a profit for the first quarter of 2016 that declined 0.6 percent from the prior year, while quarterly sales increased 0.6 percent from the previous year. The currency devaluation in Venezuela negatively impacted worldwide operational sales growth by 60 basis points, and international sales growth by 120 basis points. The company raised its fiscal year 2016 outlook.

Adjusted earnings per share topped analysts' expectations, while quarterly sales matched their estimates.

"We are off to a strong start to the year, supported by our first quarter underlying sales growth. Our Pharmaceuticals business continues to deliver impressive levels of growth, we have steady improvement in our Consumer business, and we are seeing momentum in our Medical Devices businesses, all of which are fueling our optimism for the full-year ahead," said Alex Gorsky, Chairman and Chief Executive Officer.

The company increased its adjusted earnings guidance for full-year 2016 to a range of $6.53 - $6.68 per share from the prior outlook of $6.43 - $6.58 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $6.54 per share for fiscal year 2016. Analysts' estimates typically exclude special items.

The Company updated its sales guidance for the full-year 2016 to $71.2 billion - $71.9 billion reflecting current foreign currency exchange rates. Wall Street expect annual revenues of $71.55 billion. Earlier, the company had expected annual sales to be in the range of $70.8 billion - $71.5 billion.

Net earnings for the first quarter of 2016 declined 0.6 percent to $4.29 billion from last year's $4.32 billion, with earnings per share improving 0.7 percent to $1.54 from $1.53 in the prior year.

First quarter 2016 net earnings included after-tax intangible amortization expense of approximately $0.2 billion and a charge for after-tax special items of approximately $0.2 billion.

First quarter 2015 net earnings included after-tax intangible amortization expense of approximately $0.2 billion and a net gain for after-tax special items of approximately $0.1 billion.

Excluding after-tax intangible amortization expense and special items, adjusted net earnings for the quarter were $4.69 billion or $1.68, compared to $4.42 billion or $1.56 per share in the prior year quarter. Analysts expected the company to report earnings of $1.65 per share for the first-quarter. Analysts' estimates typically exclude special items. On an operational basis, adjusted diluted earnings per share increased 10.3%.

Quarterly sales were $17.48 billion, up 0.6 percent from $17.37 billion in the prior year. Wall Street expected revenues of $17.48 billion for the quarter.

Operational sales results increased 3.9% and the negative impact of currency was 3.3%. Domestic sales increased 7.2%. International sales decreased 6.0%, reflecting operational growth of 0.6% and a negative currency impact of 6.6%. Excluding the net impact of acquisitions, divestitures and hepatitis C sales, on an operational basis, worldwide sales increased 6.9%, domestic sales increased 9.8% and international sales increased 3.8%.

Worldwide Consumer sales of $3.2 billion for the first quarter 2016 represented a decrease of 5.8% versus the prior year, consisting of an operational decrease of 0.2% and a negative impact from currency of 5.6%. Domestic sales decreased 0.1%; international sales decreased 9.6%, which reflected an operational decrease of 0.3% and a negative currency impact of 9.3%.

Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 1.9%, domestic sales increased 4.1% and international sales increased 0.5%. The currency devaluation in Venezuela negatively impacted worldwide Consumer operational sales growth by 200 basis points, and international sales growth by 320 basis points.

Primary contributors to Consumer operational sales results were over-the-counter products including TYLENOL and MOTRIN analgesics, upper respiratory products including ZYRTEC allergy medications, digestive health products, domestic LISTERINE® oral care products and international anti-smoking aids.

Worldwide Pharmaceutical sales of $8.2 billion for the first quarter 2016 represented an increase of 5.9% versus the prior year with an operational increase of 8.5% and a negative impact from currency of 2.6%. Domestic sales increased 12.9%; international sales decreased 3.4%, which reflected an operational increase of 2.6% and a negative currency impact of 6.0%. Excluding the net impact of acquisitions, divestitures and hepatitis C sales, on an operational basis, worldwide sales increased 12.3%, domestic sales increased 16.2% and international sales increased 7.1%.

Worldwide operational sales growth was driven by new products and the strength of core products. New product sales growth was negatively impacted by lower sales of OLYSIO/SOVRIAD (simeprevir) due to competitive entrants.