Johnson & Johnson said its U.S. diabetes business was off by nearly ⅓ due to Medicare’s new competitive bidding rules. That masked stabilizing performances from its bread-and-butter medical device segments, orthopedics and surgical care.
J&J reported overall profits of $4.73 billion, or $1.64 per share, on sales of $18.12 billion for the 3 months ended Dec. 31, 2013, for a top-line gain of 35.2% on sales growth of 3.5% when compared with the same period in 2012.
Adjusted to exclude 1-time items, profits were $4.43 billion, or $1.54 per share, 6¢ ahead of expectations on The Street. Johnson & Johnson also beat analysts’ sales expectation of $18.0 billion in revenues.
"Johnson & Johnson delivered strong first-quarter results driven by successful new product launches and the continued growth of key products," chairman & CEO Alex Gorsky said in prepared remarks. "Our talented colleagues around the world continue to bring meaningful innovations to patients and customers, addressing significant unmet needs. We also advanced our near-term priorities and long-term growth drivers, positioning us well to deliver sustainable results."
The New Brunswick, N.J.-based healthcare giant raised its guidance for adjusted EPS from $5.75-$5.85 to $5.80-$5.90.
Diabetes decline masks stabilizing ortho, surgical businesses
Johnson & Johnson said sales were off 14.7% for its worldwide diabetes business, driven by a 32.2% slide to $192 million in the U.S. as Medicare revamped the way it doles out large-scale supply contracts. But orthopedics sales were up 2.5% to $1.29 billion in the U.S. and rose 1.5% to $2.42 billion overall. U.S. surgical care revenues reached $539 million, a 1.5% increase; the segment’s overall sales were flat at $1.51 billion.
Specialty surgery revenues rose 4.2% to $874 million overall and 3.2% to ($417 million) in the U.S. Cardiovascular care products, aided by Johnson & Johnson’s Biosense Webster electrophysiology business, saw a sales boost of 5.5% overall, to $541 million. U.S. cardiovascular sales were $205 million, a 3.5% increase.