J&J's Q3 Profit Down, But Beats, Raises Outlook

Johnson & Johnson reported a 7.7% decline in third-quarter net income to $2.55 billion, or $0.88/share, hurt by a $528M after-tax restructuring charge related to its cost improvement program announced in July (see full story). Adjusted EPS of $1.06 and sales growth of 12.7% to $15B both beat Street estimates of $0.99/share on sales of $14.8B. J&J benefited from overseas sales growth of 21.5%, consisting of 14.7% higher operational growth and a positive forex impact of 6.8%. Domestic revenues rose 5.8%. Global sales at its Medical Devices and Diagnostics unit increased 6% to $5.2B, Pharmaceutical division sales grew 3.7% to $6.1B and Consumer segment sales jumped 47.5% to $3.6B boosted by its acquisition of Pfizer Consumer Healthcare. Sales grew fastest overseas for its pharma unit, while suffering a 2% decline domestically. J&J raised its full-year EPS outlook to between $4.10 to $4.13, from $4.02 to $4.07 previously. Analysts had expected $4.06/share. J&J's earnings conference call is at 8:30 A.M. (check later for J&J's earnings call transcript). Shares of Johnson & Johnson lost 0.4% to $65.65 on Monday and were last up 0.8% to $66.20 in thin pre-market trading.

Sources: Press release, MarketWatch
Commentary: This Week's Key Earnings Reports • Citigroup Finds Johnson & Johnson Undervalued Considering Catalysts Ahead • The Bill Cara Global 100 Best Companies Explained
Stocks to watch: JNJ. Competitors: BSX, MDT, ABT, MRK, PG, PFE. ETFs: DIA, IYH, PPH, XLV

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Comments

[PC&G:]

Glad J&J's management had the forsight to focus strongly on foreign sales, which are becoming more and more important today. J&J may be down, but they should be back up soon and I'm expecting a better quarter next quarter and their management experience is tops www.newsvisual.com/new... . Come back in 3 months and see where shares are at.

2007 Oct 16 05:32 PM