By LINDA A. JOHNSON
Rising prescription drug sales and continued recovery of Johnson & Johnson's beleaguered consumer health business in the third quarter helped the health care giant overcome slumping medical device sales.
U.S. pricing pressure forced J&J to cut prices for devices including diabetes testing products and hip replacements. And it's having trouble integrating part of orthopedic products maker Synthes, bought last year for $20 billion in J&J's biggest acquisition.
For the second straight quarter, the maker of baby shampoo and immune disorder drugs nudged up its 2013 earnings forecast by a few cents, to $5.44 to $5.49 per share. Analysts expect $5.46. In afternoon trading, shares rose 53 cents to $90.33.
The New Brunswick, N.J., company said Tuesday that net income rose to $2.98 billion, or $1.04 per share, up from $2.97 billion, or $1.05 per share, a year earlier. Excluding charges, it earned $1.36 per share, 4 cents per share more than expected.
Revenue rose 3 percent to $17.58 billion. Analysts expected $17.43 billion.
"We are still seeing (health care) utilization rates that are essentially flat year over year," Chief Financial Officer Dominic Caruso told analysts on a conference call.
That's been a problem throughout the global economic slowdown, as consumers delay elective surgical procedures and chose store brands over J&J's pricier Band-Aids and nonprescription medicines.
Those nonprescription drugs, responsible for most of J&J's roughly four dozen product recalls over the past four years, saw sales jump 18 percent in the U.S. as more products returned to stores. Pain relievers Tylenol and Motrin, among the products recalled for reasons including wrong active ingredient levels and contamination with metal and plastic particles, fueled that growth.
The consumer health business, which also makes dental, wound and skin care items such as Aveeno and Neutrogena, boosted sales 0.8 percent to $3.61 billion.