Hurt by widespread nonprescription recalls and continued production halts, Johnson & Johnson (NYSE:JNJ) reported Tuesday a sharp drop in consumer products, though the company still squeezed out a better-than-expected third-quarter profit.
The consumer products giant posted net income of $3.4 billion, or $1.23 a share, up 2.2% from $3.3 billion, or $1.20 a share, in the same quarter last year.
Earnings beat average analysts estimates polled by Thomson Reuters of $1.15 a share.
Traders seemed unimpressed with the profit gain, sending shares down nearly 2% early in the session.
Sales for the New Brunswick, NJ-based company were $15 billion, down less than a percentage from a year ago, and slightly below the Street’s view of $15.18 billion.
The results reflected a slight drop in domestic sales, led by a 24.5% decline in consumer sales, down on its massive recall of Tylenol and other nonprescription medicines, more than a dozen recorded this year alone.
Recalls continued as recently as Monday, when the pharmaceutical giant took back nearly 128,000 bottles of Tylenol in the US and Puerto Rico due to musty odors.
Suspended manufacturing at its McNeil Consumer Healthcare facility, which has remained closed as the company continues its remediation, also led to impeded sales in the division.
Worldwide pharmaceutical sales and medical devices and diagnostics were able to shed some of the consumer losses, up 4.7% to $5.5 billion, and 1.3% to $5.9 billion, respectively.
J&J CEO William C. Weldon called the quarterly results “solid,” attributing the positive outlook to improvements in the two profitable units.
Adverse to investors, who booed the results, the company expressed optimism for the full-year, raising its fiscal earnings forecast to the range of $4.70 to $4.80 a share from its earlier view of $4.65 to $4.75.