Johnson & Johnson Q2 Profit Down, But Adj. EPS Tops View; Lifts 2017 Outlook

(RTTNews) - Johnson & Johnson (JNJ) reported a profit for the second quarter of 2017 that declined 4.3 percent from the last year. But, adjusted earnings per share for the quarter topped analysts' expectations. The company raised its outlook for full-year 2017.

"Our second-quarter results reflect strong adjusted earnings growth and we are optimistic that the investments we are making will accelerate our sales growth in the second half of this year," said Alex Gorsky, Chairman and Chief Executive Officer.

In Tuesday's pre-market trading, the company's shares are up $1.41 or 1.07 percent to $133.50.

The company increased its adjusted earnings guidance for full-year 2017 to $7.12 - $7.22 per share. The company increased its sales guidance for the full-year 2017 to $75.8 billion to $76.1 billion. Wall Street currently is looking for fiscal year 2017 earnings of $7.10 per share on annual revenues of $75.67 billion. Previously, the company expected annual adjusted earnings of $7.00 to $7.15 per share, and sales of $75.4 billion to $76.1 billion.

Net earnings for the second-quarter declined 4.3 percent to $3.827 billion from the prior year's $3.997 billion, with earnings per share decreasing to $1.40 from $1.43 in the previous year.

The latest-quarter result included after-tax intangible amortization expense of about $0.4 billion and a charge for after-tax special items of approximately $0.8 billion. The prior year result included after-tax intangible amortization expense of approximately $0.2 billion and a charge for after-tax special items of approximately $0.7 billion.

Excluding after-tax intangible amortization expense and special items, adjusted net earnings for the quarter were $5.0 billion and adjusted earnings per share were $1.83, representing increases of 3.1% and 5.2%, respectively, as compared to the same period in 2016. On an operational basis, adjusted diluted earnings per share also increased 6.9%. Analysts polled by Thomson Reuters expected the company to report earnings of $1.80 per share for the second-quarter. Analysts' estimates typically exclude special items.

"The Actelion acquisition establishes a new therapeutic area as well as another engine for growth and we are pleased to welcome the Actelion colleagues to the Johnson & Johnson Family of Companies," said Alex Gorsky.

Quarterly sales were $18.84 billion for the second quarter of 2017, an increase of 1.9% as compared to the second quarter of 2016. Analysts expected revenue of $18.95 billion for the quarter.

Operational sales results increased 2.9% and the negative impact of currency was 1.0%. Domestic sales increased 1.6%. International sales increased 2.3%, reflecting operational growth of 4.4% and a negative currency impact of 2.1%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 0.5%, domestic sales decreased 1.0% and international sales increased 2.0%.

Worldwide Pharmaceutical sales of $8.6 billion for the second quarter 2017 represented a decrease of 0.2% versus the prior year with an operational increase of 1.0% and a negative impact from currency of 1.2%. Domestic sales decreased 2.6%; international sales increased 3.3%, which reflected an operational increase of 6.1% and a negative currency impact of 2.8%.

Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 0.5%, domestic sales decreased 2.6% and international sales increased 5.1%. Worldwide operational sales growth was negatively impacted by approximately 4 points due to a positive adjustment of U.S. rebate accruals in the second quarter of 2016, which did not repeat in the second quarter of 2017.