Johnson & Johnson beats profit expectations, but comes up shy on sales

Johnson & Johnson (NYSE:JNJ) last posted its quarterly earnings results on Tuesday, January 26th. Quarterly sales declined 2.4% from the prior year, but it was up 4.4% on operational basis.

CEO and chairman Alex Gorsky commented: “As we enter 2016, our core business is very healthy, and the recent decisive actions we’ve taken in support of each of our businesses position us well to drive sustainable long-term growth, faster than the markets we compete in”.

In the fourth quarter, J&J’s medical device sales fell 3.3 per cent to $US6.43 billion, representing about 36 per cent of the company’s revenue.

The company, which got nearly half of its revenue from outside the United States in 2015, said it expects 2016 full-year sales of $70.8-billion (U.S.)-$71.5-billion.

The company’s net earnings rose to $3.22 billion, or $1.15 per share, for the quarter ended December 31, from $2.52 billion, or 89 cents per share, a year earlier. The same period from the previous year had $1.37 in EPS on $18.25 billion in revenue. Earnings, adjusted for restructuring costs and amortization costs, were $1.44 per share.

Sales were $17.8 billion for the fourth quarter of 2015, a decrease of 2.4% as compared to the fourth quarter of 2014.

Among J&J’s three main business units, the pharmaceutical segment was the only one to show growth in dollar terms, edging up 0.8% thanks in large part to a almost 13% rise in USA sales.

Sales of consumer health products fell 7.9 percent to $3.32 billion.

Las week, J&J announced plans to cut about 3,000 jobs in its medical-devices division, or about 2.5% of the company’s total workforce, in the company’s latest step to revive the struggling business. Johnson & Johnson hopes to generate as much as $1 billion in annual savings from the measures by the end of 2018, which could help immensely in supporting earnings growth.

Positive contributors to Consumer operational results were sales of over-the-counter products including TYLENOL and MOTRIN analgesics, upper respiratory products including ZYRTEC allergy medications, and digestive health products; worldwide feminine protection products; LISTERINE oral care products; and NEUTROGENA skin care products.

While hep C therapy Olysio may have been hurting, other new drugs continued to expand by leaps and bounds. For example, she said recently approved Darzalex, for the blood cancer multiple myeloma, eventually could produce billions in annual sales. The Company has more than 265 operating companies conducting business around the world. In medical devices, the company benefited from sales of endocutters and biosurgical products, as well as insulin pump products and various cardiovascular and orthopedic devices. It was short, however of analyst projections for 17.94 billion.