Healthcare titan Johnson & Johnson (NYSE:JNJ) scored some hits and misses with Wall Street upon releasing its 1st-quarter 2013 earnings report, touting a 10% overall increase in medical devices and diagnostics revenues but failing to thrill analysts.
Total company sales grew 8.5% during its 1st quarter 2013, but profits slid 10.6% and per-share earnings dropped 13.5%, according to today’s filing.
J&J reported $3.50 billion in profits, or $1.22 per diluted share, on sales of $17.51 billion during Q1 2013; that compared with profits of $3.91 billion, or $1.41 per share, on sales of $16.14 billion during the same period last year.
Excluding the impact of special items, such as legal expenses and in-process research & development, J&J reported $1.44 earned per share, beating Wall Street’s $1.40 estimate by 2.8% and beating last year’s Q1 adjusted EPS by 5.1%.
Analysts at Leerink Swann weren’t terribly impressed with the numbers, reporting that J&J’s medical device and diagnostic sales "missed in all businesses" compared with estimates, with cardiovascular care being the only exception.
J&J’s weaker than expected general surgery sales in particular may "signal weakening hospital admissions trends in the quarter and could impact the MedTech group more broadly," the analysts noted.
Nevertheless, JNJ shares rose 2% as of about 12:50 p.m. today, trading at $83.36 from an open of $82.33.
Worldwide medical device and diagnostics sales grew 10.2% to $7.1 billion during Q1, consisting of an operational increase of 11.9% and a negative currency impact of 1.7%. U.S. sales grew 11.4% and overseas revenues grew 9.1%, according to SEC filings.
J&J has been mired in a handful of lawsuits, including for its metal-on-metal hips and its gynecological mesh implants. The company reported a total of $529 million in litigation expenses during its 1st quarter, representing a 14¢ per share chunk of its earnings.
Integration and transaction costs associated with the Synthes merger, which closed in June 2012, took about 6¢ from the company’s bottom line, but contributed 14% to worldwide sales, 17% in the U.S. and 12 % internationally.
"We delivered solid 1st quarter results led by the success of many of our recently launched pharmaceutical products and the addition of Synthes to our orthopedics business," chairman & CEO Alex Gorsky said in prepared remarks. "Our investments to advance our pipelines and expand our global presence, along with the outstanding efforts of our talented people, will enable us to continue to deliver sustainable growth and meaningful innovations to patients and customers around the world."
Other primary contributors included the company’s orthopedics business, which is mired in lawsuits over the recalled hip implants. Nonetheless, J&J reported a 59.7% boost in sales for its orthopedics division, which brought in $2.39 billion in revenue during the 1st quarter, compared with $1.49 billion during the same period last year.
J&J also reported growth in its cardiovascular care business, where sales grew 6.4% to $513 million during the quarter, but the company’s remaining divisions reported declines.
Diabetes care sank 10.4%, diagnostics were down 6.8%, diagnostics lost 6.8% and surgical care dropped 7.2%, according to the recent filing. Both specialty surgery and vision care reported mild gains, but swung to losses due to negative currency impacts.
Consumer sales increased 2.2% to $3.7 billion worldwide during the 1st quarter, representing a 2.4% increase in the U.S. and a 2.1% increase abroad. Global pharmaceutical sales jumped 10.4% to $6.8 billion, with a 14.7% boost in the U.S. and 6.1% overseas.
The New Brunswick, N.J., healthcare giant confirmed its 2013 earnings guidance of $5.35-$5.45 per share, excluding the impact of special items.
