Johnson & Johnson, the world's biggest maker of health care products, reported fourth-quarter profit that beat analysts' estimates as demand for the company's newest drugs accelerated.
Net income gained 37 per cent to $3.52 billion, or $1.23 a share, from $2.57 billion, or 91 cents, a year earlier, the New Brunswick, New Jersey-based company said on Tuesday in a statement. Earnings excluding one-time items beat by 4 cents the $1.20 average of 16 analysts' estimates compiled by Bloomberg.
J&J has brought new medicines to the market the past two years while it integrated the 2012 acquisition of closely held device maker Synthes Inc, the largest purchase in company history.
"Proceeds from the diagnostic division sale could spur more mergers and acquisitions and stock buybacks," said Glenn Novarro, an analyst with RBC Capital Markets in New York, in a note. "With the integration of Synthes now largely behind Johnson & Johnson, we believe the company could become more aggressive in 2014."
2014 forecast
The company forecast 2014 profit of $5.75 to $5.85 a share, excluding one-time items. The outlook was below the $5.86 average of 18 analysts' estimates compiled by Bloomberg. Fourth-quarter revenue increased 4.5 per cent to $18.4 billion from $17.6 billion a year earlier. J&J's results benefited from a tax benefit of $707 million, or 25 cents a share.
J&J fell 1.6 per cent to $93.57 at 9:53 am New York time. The shares gained 30 per cent in the 12 months ended last week.
Sales of consumer goods and over-the-counter medicines, including Tylenol and Motrin, climbed 2.8 per cent to $3.75 billion as the company made progress in returning recalled products to US store shelves.
"We are restoring a reliable supply of OTC products to the US marketplace," Chief Executive Officer Alex Gorsky said at a shareholders' meeting in New York on Tuesday. "We are starting to see them gain traction once they are back in the market," he said. "We met our goal of returning approximately 75 per cent of our planned product portfolio to store shelves."
Demand for prescription drugs gained 12 per cent to 7.3 billion, helped by the prostate cancer drug Zytiga, the schizophrenia treatment Invega Sustenna, the arthritis medicine Simponi, the psoriasis drug Stelara and the diabetes drug Invokana.
Hepatitis C
J&J and Medivir AB won approval in November for the hepatitis C therapy Olysio, the first approved pill designed to be a more convenient therapy with fewer side effects than current treatments. Gilead Sciences Inc. also has won approval of its new pill in a competitive market for hepatitis C therapies that may generate $100 billion over a decade.
While the blood thinner Xarelto has been one of J&J's newest and fastest-growing medicines, the company failed Jan. 16 to win the backing of a U.S. advisory panel to expand approval for patients with serious chest pain or mild heart attacks. J&J and its partner Bayer AG are trying for the third time to gain Food and Drug Administration clearance for those patients.
Net income gained 37 per cent to $3.52 billion, or $1.23 a share, from $2.57 billion, or 91 cents, a year earlier, the New Brunswick, New Jersey-based company said on Tuesday in a statement. Earnings excluding one-time items beat by 4 cents the $1.20 average of 16 analysts' estimates compiled by Bloomberg.
J&J has brought new medicines to the market the past two years while it integrated the 2012 acquisition of closely held device maker Synthes Inc, the largest purchase in company history.
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The company last week received a $4.15-billion offer for its lone diagnostics division from Carlyle Group LP, following competitors such as Pfizer Inc in divesting units that aren't market leaders.
"Proceeds from the diagnostic division sale could spur more mergers and acquisitions and stock buybacks," said Glenn Novarro, an analyst with RBC Capital Markets in New York, in a note. "With the integration of Synthes now largely behind Johnson & Johnson, we believe the company could become more aggressive in 2014."
2014 forecast
The company forecast 2014 profit of $5.75 to $5.85 a share, excluding one-time items. The outlook was below the $5.86 average of 18 analysts' estimates compiled by Bloomberg. Fourth-quarter revenue increased 4.5 per cent to $18.4 billion from $17.6 billion a year earlier. J&J's results benefited from a tax benefit of $707 million, or 25 cents a share.
J&J fell 1.6 per cent to $93.57 at 9:53 am New York time. The shares gained 30 per cent in the 12 months ended last week.
Sales of consumer goods and over-the-counter medicines, including Tylenol and Motrin, climbed 2.8 per cent to $3.75 billion as the company made progress in returning recalled products to US store shelves.
"We are restoring a reliable supply of OTC products to the US marketplace," Chief Executive Officer Alex Gorsky said at a shareholders' meeting in New York on Tuesday. "We are starting to see them gain traction once they are back in the market," he said. "We met our goal of returning approximately 75 per cent of our planned product portfolio to store shelves."
Demand for prescription drugs gained 12 per cent to 7.3 billion, helped by the prostate cancer drug Zytiga, the schizophrenia treatment Invega Sustenna, the arthritis medicine Simponi, the psoriasis drug Stelara and the diabetes drug Invokana.
Hepatitis C
J&J and Medivir AB won approval in November for the hepatitis C therapy Olysio, the first approved pill designed to be a more convenient therapy with fewer side effects than current treatments. Gilead Sciences Inc. also has won approval of its new pill in a competitive market for hepatitis C therapies that may generate $100 billion over a decade.
While the blood thinner Xarelto has been one of J&J's newest and fastest-growing medicines, the company failed Jan. 16 to win the backing of a U.S. advisory panel to expand approval for patients with serious chest pain or mild heart attacks. J&J and its partner Bayer AG are trying for the third time to gain Food and Drug Administration clearance for those patients.