This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

J&J 2Q Profit Drops 20 Percent, Still Beats Views

LINDA A. JOHNSON

Product recalls, flat U.S. sales and litigation and restructuring costs slashed Johnson & Johnson's second-quarter profit by 20 percent, and that's after a big currency exchange benefit boosted results.

J&J executives said Tuesday that they're making progress on their manufacturing problems and have numerous new drugs, medical devices and toiletries hitting the market or coming soon. But J&J shares fell by 1.4 percent before recovering somewhat, a big drop for the health care giant, which makes everything from Band-Aids and Listerine to biologic medicines and surgical devices.

J&J said its second-quarter profit fell nearly 20 percent due to the one-time costs and higher spending on product launches, manufacturing improvements and research.

While the results topped Wall Street expectations, total U.S. revenue was flat as consumer health product sales were down 8.5 percent because recalled products remain off store shelves. Foreign sales were up 16 percent, but mostly due to favorable exchange rates.

On the bright side, sales were up in all three divisions â¿¿ consumer health, prescription drugs and medical devices and diagnostics â¿¿ for the first time since 2009's last quarter, shortly after the start of an embarrassing series of more than 25 product recalls.

Investors weren't impressed, as shares fell 69 cents, or 1 percent, to $66.40 in afternoon trading while the broader markets edged higher.

The New Brunswick, N.J., company said its net income was $2.78 billion, or $1 per share, boosted by a lower tax rate than last year at 19.6 percent. Net income was $3.45 billion, or $1.23 per share, in the 2010 second quarter.

Revenue rose 8.3 percent, to $16.6 billion from $15.33 billion a year ago.

Excluding one-time items, income would have been $3.55 billion, or $1.28 per share. The items totaled $991 million, including $676 million for restructuring the ailing Cordis heart device business, $363 million for litigation and $54 million for recalling defective DePuy hip implants, partly offset by a $102 million gain from a currency option.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 18,162.99 +121.45 0.67%
S&P 500 2,123.48 +19.28 0.92%
NASDAQ 5,106.5930 +73.8420 1.47%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs