Johnson & Johnson Q2 Results Top Estimates, Lifts FY16 Forecast

(RTTNews) - Healthcare major Johnson & Johnson (JNJ) reported Tuesday a decline in second-quarter profit mainly hurt by higher charges. Adjusted earnings topped analysts' estimates as sales also increased above market view. Further, the company lifted its fiscal 2016 earnings and sales forecast.

In pre-market activity on the NYSE, Johnson & Johnson shares were gaining 3.13 percent to trade at $127.

Johnson & Johnson's net earnings for the second quarter declined 11.5 percent to $4 billion from last year's $4.52 billion. Earnings per share were $1.43, lower than $1.61 a year ago.

Excluding certain expenses and charges, adjusted net earnings were $4.87 billion or $1.74 per share, compared to $4.81 billion or $1.71 per share a year ago.

On average, 20 analysts polled by Thomson Reuters expected earnings of $1.68 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly sales were $18.48 billion, an increase of 3.9 percent from last year's $17.79 billion. Analysts were looking for sales of $17.97 billion.

Operational sales results increased 5.3 percent and the negative impact of currency was 1.4 percent.

The company noted that worldwide operational sales growth was driven by new products and the strength of core products. The company generated higher sales in new products including cancer drug IMBRUVICA (ibrutinib), XARELTO (rivaroxaban), an oral anticoagulant, and multiple myeloma drug DARZALEX (daratumumab), among others.

New product sales growth was negatively impacted by lower sales of OLYSIO/SOVRIAD (simeprevir) due to competitive entrants.

In the quarter, domestic sales grew 7.4 percent, while international sales edged up 0.4 percent, reflecting operational growth of 3.1 percent and a negative currency impact of 2.7 percent.

Excluding the net impact of acquisitions, divestitures and hepatitis C sales, on an operational basis, worldwide sales increased 7.9 percent, domestic sales increased 8.8 percent and international sales increased 6.9 percent.

The company noted that operations in Venezuela negatively impacted worldwide operational sales growth by 30 basis points, and international sales growth by 70 basis points.

Worldwide Consumer sales decreased 1.8 percent, mainly due to weak international sales. Pharmaceutical sales, however, grew 8.9 percent, and Medical Devices sales edged up 0.8 percent.

Alex Gorsky, Chairman and Chief Executive Officer, said, "We continue to see good momentum through the first half of 2016, delivering solid results in the second quarter, supported by strong underlying growth across our enterprise. We saw notable strength in our Pharmaceuticals business due to the continued success of new products, and also achieved significant clinical milestones, advancing our robust pipeline."

Looking ahead, for fiscal 2016, the company now expects adjusted earnings of $6.63 to $6.73 per share, and sales of $71.5 billion to $72.2 billion. The company previously expected full-year adjusted earnings in a range of $6.53 - $6.68 per share and sales of $71.2 billion to $71.9 billion Wall Street expect annual earnings of $6.61 per share and revenues of $71.72 billion.