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Earnings Preview: J&J 1Q To Focus On Newest Drugs

The No More Tears shampoo maker is facing thousands of lawsuits over mesh implants to lift sagging pelvic organs that have caused pain, infection and other complications; painful, recalled artificial hips and a schizophrenia drug, Risperdal, blamed for triggering diabetes. The Justice Department and numerous states have sued J&J over improper marketing of Risperdal, for allegedly downplaying side effects and paying bribes to get nursing homes to put patients on the drug. It turned out to hasten death in elderly people with dementia.

WHY IT MATTERS: J&J has put the worst of its hits from generic competition behind it, is enjoying rising sales from the blood thinner Xarelto and just got another likely blockbuster approved, Invokana. But the product recalls continue, although they're rarer these days.

CEO Alex Gorsky, who took over last April, seems to be enjoying a honeymoon with analysts and investors, who are watching to see how he'll make good on his priorities, particularly fixing the consumer health business.

In December, he brought in a highly regarded Bayer AG exec, Sandra Peterson, to run the division, making her the first outsider ever to join the executive committee that manages J&J.

J&J's stock price had been virtually flat for the decade through last June, limiting its appeal mainly to investors seeking a safe harbor and a strong dividend. But since last June, shares have run up from $62 to just over $82 now. Shares hit an all-time high of $82.95 this month. And suddenly analysts are talking up the stocks of J&J and many big drugmakers.

WHAT'S EXPECTED: Analysts polled by FactSet, on average, expect earnings per share of $1.40 and sales of $17.46 billion.

LAST YEAR'S QUARTER: J&J reported net income of $3.91 billion, or $1.41 per share, on revenue of $16.14 billion.


Follow Linda A. Johnson at

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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