Message Font: Serif | Sans-Serif
No. of Recommendations: 1
Here's a better article with more facts about the quarter, not just commentary.

"Johnson & Johnson 3rd-Quarter Net Rises 14% on Drugs (Update1)
(Adds analyst comment in 4th paragraph; updates shares.)

New Brunswick, New Jersey, Oct. 19 (Bloomberg) -- Johnson & Johnson, the world's No. 1 maker of medical products, said third- quarter profit rose 14 percent as it sold more drugs, such as the anemia treatment Procrit, and more medical devices.

Net income for the maker of Tylenol and Band-Aids rose to $1.1 billion, or 80 cents a share, from $961 million, or 70 cents, in the year-earlier period. That beat the 78-cent average estimate of analysts polled by First Call Corp. J&J said its sales rose 18 percent to $6.75 billion from $5.72 billion.

J&J's medical-devices sales rose 20 percent to $2.45 billion from $2.04 billion. Sales in the drug unit rose 24 percent to $2.6 billion from $2.1 billion, spurred by Procrit, an anemia drug licensed from Amgen Inc. New Brunswick, New Jersey-based J&J also had rising sales of the schizophrenia pill Risperdal and antibiotics such as Levaquin. ``The staple drugs, Risperdal and Procrit and Levaquin, are doing well, but beyond that, the pipeline's still a little skimpy compared to other drug companies,' said Brian Kim, an analyst with CS First Boston who has a ``hold' rating on J&J.

J&J's $3.5 billion purchase of orthopedics maker DePuy Inc. last November helped bolster its medical-devices unit after J&J fell behind in the market for angioplasty products. Sales in its consumer division, which includes non-prescription medicines and personal-care products, rose 7.4 percent to $1.7 billion from $1.59 billion.

J&J is looking to new products to raise its sales, though some of its older drugs remain the biggest contributors to profit. J&J earlier this month made its biggest acquisition, the biotech company Centocor Inc. for $4.9 billion. That gives J&J a new drug, the clot-preventer ReoPro, used in hospitals to treat people undergoing an artery-opening procedure.


J&J pioneered the use of stents, tiny metal-mesh tubes that prop open once-clogged arteries, starting what has grown in less than a decade to a market with about $2 billion in annual sales. J&J lost dominance in the stent market in the past few years as rivals such as Guidant Corp. introduced more-flexible devices. These were easier for doctors to thread into clogged and often hardened arteries.

The CrossFlex and other new stents under development will help J&J's Cordis unit better compete with rivals in the stent market, analysts said.

J&J also has introduced new products in its consumer business, including Neutrogena lipsticks. It also introduced cholesterol-reducing Benecol spreads, which are licensed from Finland's Raisio Oyj. In August, U.S. officials approved J&J's new sweetener Splenda.

Shares of J&J rose 3 3/8 to 97 7/8 in early trading. J&J shares have risen 13 percent this year, based on yesterday's closing price."

The market seems to like the earnings, and currently the stock is up over 4. J&J has done a great job of managing expectations, enabling them to beat earnings expectations every quarter this year. You would think that the analyst would catch on that J&J is growing faster, but they don't.


PS - I thought that the Centocor would lower earnings this year by about 15 cents a share. Did I hear that wrong, or will that "charge" occur in the fourth quarter?
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.