Johnson & Johnson Results Top Wall Street Views
Johnson & Johnson reported Tuesday better-than-expected fourth quarter sales and earnings, helped by a recovering global economy, but provided a 2010 profit forecast range that barely reached Wall Street projections.
The pharmaceutical and consumer products company said it earned $1.02 a share on a non-GAAP basis in its fourth quarter, above analysts’ estimates of 97 cents a share and up from 94 cents a share a year earlier.
Sales reached $16.6 billion, topping expectations of $15.7 billion and up from $15.18 billion a year ago.
J&J, which is known for making conservative forecasts, predicted a full-year 2010 profit of $4.85 per share to $4.95 per share excluding items. Analysts have expected $4.94 per share.
Shares of Johnson & Johnson [JNJ 63.22 — UNCH (0)] rose in pre-market trading Tuesday.
“In a year of tremendous challenge, we maintained our long-term focus while delivering solid results—a great tribute to the employees of Johnson & Johnson,” said William Weldon, chairman and CEO of J&J in a prepared statement.
“We made important investments in acquisitions, strategic partnerships and launches of recently-approved innovative products while preserving our financial flexibility to continue to invest in innovation. This positions us well for continued leadership and growth in global health care as we enter 2010,” he continued.
A household name for its “No More Tears” baby shampoo, Band-Aids and Clean & Clear skin care line, Johnson & Johnson had a difficult quarter. The New Brunswick, N.J.-based company announced its second major restructuring in 2 1/2 years and a still-expanding recall of Tylenol and other popular consumer brands.
In addition, the Food and Drug Administration for a second time rejected J&J’s experimental antibiotic ceftobiprole, for complicated skin infections like MRSA, in December, saying it will require additional studies.
The Tylenol recall, first announced in November, has twice been expanded and now includes products in the Motrin, Benadryl, Rolaids, St. Joseph’s aspirin and Simply Sleep lines. The items have a mildew-like odor associated in some cases with nausea, stomach pain and vomiting.
The restructuring, J&J’s biggest ever, aims to pare expenses by roughly $1.5 billion a year after 2011 and to address declines in sales of a couple of blockbuster prescription drugs with generic competition and lower consumer product sales because of the recession. Total revenue fell 5 percent in the third quarter, marking an unprecedented four straight quarters with revenue down significantly, after years of steady sales and profit increases.
The company said it will pare its work force by up to 8,000 jobs, or nearly 7 percent of the worldwide staff, over the next few years. Last August, J&J said it was consolidating management, starting by eliminating executive posts at its comprehensive care division. A restructuring begun in July 2007 eliminated roughly 4 percent of jobs.