Johnson & Johnson (NYSE:JNJ) revealed Tuesday a 20% decline in second-quarter profit that missed expectations, as strong international demand could not wholly offset virtually flat sales in the U.S. and costs climbed on recalls and settlements.
The New Brunswick, N.J.-based consumer products and pharmaceutical giant posted net earnings of $2.8 billion, or a dollar a share, compared with $3.45 billion, or $1.23 a share, in the same quarter last year.
Its earnings were hit partially by litigation settlements and costs related to its DePuy ASR Hip recall. Excluding those one-time items, though, the company earned $1.28 a share, beating the Streets view of $1.24.
Our recently launched pharmaceutical products continued to achieve strong growth and contributed to our solid second quarter results, J&J chief executive William Weldon said in a statement. We received several new product approvals across our businesses which will benefit patients around the world and drive future growth.
Revenue for the three-month period was $16.6 billion, up 8.3% from $15.3 billion a year ago, ahead of average analyst estimates polled by Thomson Reuters of $16.23 billion.
While international sales grew 15.6%, those in the U.S. were nearly flat. Worldwide consumer sales climbed 4% to $3.8 billion, offset by very soft over-the-counter sales in the U.S. due to the suspensions at its McNeil Consumer Healthcare facility.
Fueling revenue was strong demand for Neutrogena, Le Petit Marseillais and Aveeno skin care brands, baby care products and international over-the-counter medicines and nutritionals. Pharmaceuticals in all markets performed well, particularly its most recently launched products.
Despite the tepid performance, J&J maintained its fiscal guidance in the range of $4.90 to $5 a share, with excludes one-time items. Analysts are looking for a profit of $4.95 a share.