Johnson & Johnson (JNJ) slashed its full-year earnings outlook and reported a drop in second-quarter profit, citing a decline in worldwide consumer and pharmaceutical sales.
The New Brunswick, N.J.-based consumer goods and drug company reported on Tuesday net earnings of $1.4 billion, or 50 cents, compared with a year-earlier $2.78 billion, or a dollar a share.
Excluding one-time charges, earnings were $1.30 a share, beating average analyst estimates in a Thomson Reuters poll by a penny.
Revenue for the three-month period was $16.5 billion, down 0.7% from a year ago, below the Street’s view of $16.69 billion.
J&J’s recent $19.7 billion acquisition of trauma device maker Synthes helped contribute 1.2% to worldwide operational sales growth. Marking its biggest investment ever, the health care giants is hopeful Synthes will give it a dominant position in the growing orthopedic and neurological markets.
“Our pharmaceutical pipeline continued its strong momentum this quarter with the submission of several new drug applications, as well as strong growth from several recently launched products that meet critical patient needs,” J&J CEO Alex Gorsky said in a statement.
However, results were weighed down by a 1.2% drop in domestic sales and a 0.4% decline in international revenue, mostly a reflection of a 4.6% drop to $3.6 billion in worldwide consumer sales. Pharmaceutical sales dipped about 0.9% to $6.3 billion.
The maker of prescription drugs such as HIV treatment Prezista and consumer products such as Neutrogena lotion and baby powder cut its fiscal 2012 outlook to the range of $5 to $5.07 a share, excluding special items. Analysts are looking for stronger earnings of $5.14.
J&J, whose shares fell more than 1% in morning trade, said the bleak outlook reflects negative foreign exchange rates.