Johnson & Johnson (NYSE:JNJ) said today that it’s mulling the proverbial “strategic options” for its diabetes business, including the LifeScan, Animas and Calibra Medical brands.
“Strategic options may include the formation of operating partnerships, joint ventures or strategic alliances, a sale of the businesses, or other alternatives either separately or together,” the healthcare conglomerate said in reporting its 4th-quarter and full-year earnings this morning. “All options will be evaluated to determine the best opportunity to drive future growth and maximize shareholder value. There can be no assurance that this process will result in any transaction or other strategic alternative of any kind.”
Diabetes sales were off for both periods, sliding -3.8% to $462 million during Q4 and -7.2% to $1.79 billion for full-year 2016.
New Brunswick, N.J.-based Johnson & Johnson also said it missed the consensus top-line forecasts but still eked out earnings beats for both the quarter and 2016.
Profits were $3.81 billion, or $1.38 per share, on sales of $18.11 billion for the 3 months ended Dec. 31, 2016, representing a bottom-line gain 18.6% on sales growth of 1.7% compared with Q4 2015. Adjusted to exclude 1-time items, earnings per share were $1.58, 2¢ ahead of the Wall Street consensus estimate; analysts there were looking for sales of $18.28 billion.
Full-year profits grew 7.3% to $16.54 billion, or $5.93 per share, on sales growth of 2.6% to $71.89 billion. Adjusted EPS came in at $6.73, again 2¢ ahead of The Street, but J&J missed the consensus sales number of $72.03 billion.
“We are pleased to report that we accelerated our adjusted growth for 2016 over the prior year, and delivered a strong total shareholder return of greater than 15%. The strong adjusted sales and EPS growth was driven by the impressive performance of our pharmaceutical business and continued momentum in our medical device business and share gains while improving profitability in our consumer business,” chairman & CEO Alex Gorsky said in prepared remarks. “Looking forward to 2017, we expect to continue driving sustainable, long-term growth through the new products, science and innovation that our talented colleagues and partners of Johnson & Johnson are advancing to positively impact human health.”
Johnson & Johnson said it expects to report adjusted EPS of $6.93 to $7.08 on sales of $74.1 billion to $74.8 billion this year.
Medical device sales flat
Including the diabetes division’s declines, J&J’s medical device business posted flat sales for both periods. Fourth-quarter medical device sales were up 0.2% to $6.44 billion; full-year sales slipped -0.1% to $25.12 billion. Here’s a look at how the division broke down:
| Q4 | 2016 | |||
| Cardiovascular | $485.00 | 10.5% | $1,849.00 | -9.2% |
| Diabetes | $462.00 | -3.8% | $1,789.00 | -7.2% |
| Ortho | $2,387.00 | -1.5% | $9,334.00 | 0.8% |
| Surgery | $2,387.00 | -1.1% | $9,296.00 | 0.9% |
| Vision | $721.00 | 11.3% | $2,785.00 | 6.8% |
JNJ shares were off -2.5% to $111.11 each today in pre-market trading.
