J&J Profit Rises Amid Legal Woes -- WSJ
January 23 2020 - 2:02AM
Dow Jones News
By Dave Sebastian and Peter Loftus
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 23, 2020).
Johnson & Johnson said its profit and sales rose for the
fourth quarter, with increased pharmaceutical and consumer-product
sales helping to offset a slight drop in medical-device sales.
J&J's fourth-quarter adjusted earnings topped Wall Street
estimates, but its sales fell just short of expectations. J&J
shares declined 1.1% to $147.63 in morning trading Wednesday.
Alex Gorsky, chief executive of the New Jersey-based
health-products company, told analysts on a conference call the
company's performance was strong in 2019, especially in light of
challenges including "today's litigious environment" -- a reference
to lawsuits against J&J over the safety and marketing of
various products such as opioids and baby powder.
The company says it continues to work with a committee of U.S.
state attorneys general to finalize last year's agreement in
principle for J&J to pay about $4 billion to resolve its
portion of the opioid litigation.
The quarterly performance of J&J, one of the world's biggest
health-care companies with a range of products spanning the market,
is considered a bellwether for the rest of the industry.
The company reported net income of $4.01 billion, or $1.50 a
share, compared with $3.04 billion, or $1.12 a share, in the
year-ago period. Excluding special items, Johnson & Johnson
earned $1.88 a share.
Analysts polled by FactSet were expecting adjusted earnings of
$1.87 a share.
U.S. sales rose 1.4% to $10.77 billion from the comparable
quarter a year earlier, and international sales rose 2.1% to $9.97
billion. Foreign-exchange rates reduced international sales growth
by 1.9 percentage points.
Sales in the company's pharmaceuticals division rose 3.5% to
$10.55 billion. Strong sales growth for anti-inflammatory drug
Stelara and cancer drug Darzalex helped offset sales declines for
cancer drug Zytiga and anti-inflammatory drug Remicade due to
generic competition.
Sales in its medical-devices business fell 0.5% to $6.63
billion. Some product segments, such as contact lenses and
artificial hips, had sales growth, but a decline in surgery
products weighed on the medical-device unit. Mr. Gorsky said he was
disappointed in the performance of some of its surgical segment,
and the company is developing plans to address that.
Sales of consumer products, which include Neutrogena beauty
products and Tylenol medicine, rose 0.9% to $3.57 billion.
Over-the-counter medicine sales rose, but baby care products, which
include Johnson's Baby Powder, posted a sales decline.
For 2020, the company said it sees operational sales, excluding
the impact of currency exchange rates, of $85.8 billion to $86.6
billion. The company expects adjusted operational sales to grow 5%
to 6% from a year earlier.
Johnson & Johnson predicted adjusted per-share earnings of
$8.95 to $9.10 for 2020.
J&J also is targeting a 20% reduction in its carbon
emissions this year, and to procure 35% of its electricity from
renewable resources, Mr. Gorsky said.
J&J has had a series of costly legal setbacks. In August, an
Oklahoma judge ordered the company to pay $572 million for
contributing to the state's opioid-addiction crisis. Overall,
J&J is facing lawsuits from about 100,000 plaintiffs over the
safety and marketing of products including Johnson's Baby Powder,
opioids and medical devices. The company has said it has properly
disclosed the risks and benefits of its products, and that it has
marketed them appropriately.
Write to Dave Sebastian at dave.sebastian@wsj.com and Peter
Loftus at peter.loftus@wsj.com
(END) Dow Jones Newswires
January 23, 2020 02:47 ET (07:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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