The New Brunswick, N.J.-based healthcare conglomerate posted profits of $4.52 billion, or $1.61 per share, on sales of $17.79 billion for the 3 months ended June 30, for bottom-line growth of 4.4% on an -8.8% sales decline.
Adjusted to exclude 1-time items, earnings per share were $1.71. Analysts were looking for adjusted EPS of $1.67 per share on sales of $17.75 billion.
J&J, which boasts the world’s largest medtech business, said sales for its medical device & diagnostics segment were $6.4 billion during the quarter, down 12.2% following the sale of Ortho-Clinical Diagnostics and the loss of its $2 billion in annual sales.
Chairman & CEO Alex Gorsky acknowledged that sales of medical devices, 1 of the company’s big 3 product lines, have disappointed in recent quarters, but in a conference call, he urged industry analysts to remain patient.
“We are absolutely committed to accelerating our growth in medical devices through innovation” and research, Gorsky said. “We don’t think these are commodity businesses.”
“Investors would like to see the medical device business do better, but the company doesn’t have enough products in development that are differentiated” from rival brands, RBC Capital Markets analyst Glenn Novarro said.
J&J needs to buy cutting-edge medical devices and prescription drugs, whose revenue will be sorely needed to offset expected competition by 2018 from biosimilar forms of J&J’s blockbuster Remicade arthritis drug, Novarro said.
“Our solid sales and earnings results in the quarter reflect the strong underlying growth we’re seeing across the enterprise,” Gorsky said in prepared remarks. “Our diverse portfolio and scale are enabling this performance, and we’ve continued to invest in building a robust enterprise pipeline that will drive our growth over the long term. Our passion to deliver transformational new medicines and products reflects the ongoing commitment of our dedicated employees to improve health and well-being.”
Johnson & Johnson raised its adjusted EPS guidance for the full year, to $6.10-$6.20 per share, up from its prior outlook of $6.04-$6.19.
Material from Reuters was used in this report.