Johnson & Johnson Q4 Profit Declines, But Beats View

(RTTNews) - Healthcare giant Johnson & Johnson (JNJ) on Tuesday reported a 28 percent decrease in profit for the fourth quarter from last year, reflecting one-time charges and a slight decline in sales. However, adjusted earnings per share for the quarter beat analysts' expectations by a penny, while sales missed their estimates.

The New Brunswick, New Jersey-based company's net earnings for the fourth quarter were $2.52 billion or $0.89 per share, down from $3.52 billion or $1.23 per share in the year-ago period.

The latest quarter's results included a charge for after-tax special items of about $1.1 billion, primarily related to an increase in the litigation accrual, integration costs related to the acquisition of Synthes, Inc., and an in-process research and development charge. The year-ago quarter's results included a net charge for after-tax special items of $42 million.

Excluding these items, adjusted net earnings for the latest quarter were $3.61 billion or $1.27 per share, compared to $3.56 billion or $1.24 per share in the prior year. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $1.26 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged down less than 1 percent to $18.25 billion from $18.36 billion in the same period last year. Analysts' revenue consensus was $18.55 billion for the quarter.

Operational results for the quarter increased 3.9 percent, while the negative impact of currency was 4.5 percent, the company said.

In the quarter, domestic sales increased 7.4 percent from last year to $8.60 billion. However, international sales decreased 6.7 percent to $9.65 billion, reflecting operational growth of 1.2 percent and a negative currency impact of 7.9 percent.

Worldwide Consumer segment sales for the quarter declined 4 percent to $3.61 billion, consisting of an operational increase of 0.9 percent and a negative impact from currency of 4.8 percent. Domestic sales rose 2.5 percent, while international sales declined 7.1 percent.

Pharmaceutical sales for the quarter grew 10 percent to $8.00 billion, driven by domestic sales growth of 22.7 percent. Meanwhile, international sales declined 2.7 percent.

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.

Worldwide Medical Devices sales for the quarter declined 9 percent to $6.65 billion, representing an operational decrease of 4.7 percent and negative currency impact of 4.3 percent.

For fiscal 2014, Johnson & Johnson's net income rose to $16.32 billion or $5.70 per share from $13.83 billion or $4.81 per share in the previous year. Adjusted net earnings for the year were $17.11 billion or $5.97 per share, compared to $15.88 billion or $5.52 per share last year.

Net sales for the year rose 4 percent to $74.33 billion from $71.31 billion in the prior year.

Street expected the company to earn $5.96 per share for the year on revenues of $74.72 billion.

Looking ahead to fiscal 2015, Johnson & Johnson forecast adjusted earnings of $6.12 to $6.27 per share. Analysts project full-year earnings of $6.13 per share.

The company noted that beginning in 2015, adjusted earnings excludes after-tax intangible amortization expense in addition to special items. After-tax intangible amortization expense for 2014 was about $0.42 per share and for 2015 is anticipated to be about $0.32 per share.

JNJ closed Friday's trading at $104.04. In Tuesday's pre-market activity, the stock is down $1.70 or 1.63 percent to $102.34.