Johnson & Johnson Boosts Outlook, Thanks to Stents

Updated from 3:37 p.m. EDT

A solid third quarter and the promise of a healthy fourth quarter prompted Johnson & Johnson(JNJ Quote) to raise its full-year earnings prediction Tuesday.

"We look forward to finishing the year with a strong fourth quarter," said Robert J. Darretta, the company's chief financial officer, in a telephone conference call with analysts and investors. The company upped its outlook for the year to $2.64 from $2.62 excluding one-time gains.

J&J's stock closed at $50.93, gaining 2.3%, or $1.14.

Helped by its Cypher drug-coated stent for treating heart disease, J&J reported earnings per share of 69 cents for the third quarter, up 21% from the same period last year and 1 cent ahead of the Wall Street consensus of 21 analysts polled by Thomson First Call.

Net earnings rose 20% to $2.07 billion for the three months ended Sept. 30, and revenue gained 15.2% to $10.46 billion from the same period last year.

J&J has the only drug-coated stent available in the U.S., although Boston Scientific(BSX Quote) is in hot pursuit. Boston Scientific's drug-coated stent will be discussed Nov. 20 by an advisory committee of the Food and Drug Administration. A favorable response by the panel and the FDA could bring competition to J&J by early 2004.

But for now, J&J could luxuriate in the news that Cyper brought in $429 million in U.S. revenue -- and $489 million total revenue -- for the three months ended Sept. 30, the first full quarter of Cypher's U.S. sales.

Cypher was approved by the FDA in late April, but J&J experienced manufacturing and distribution problems that caused supply to fall far short of demand. Company executives said Tuesday the final residue of those problems will be gone domestically and internationally by the end of this month.