Johnson & Johnson increased its sales and profit guidance for the third quarter in a row as the company's pharmaceutical unit helped deliver its biggest earnings beat so far this year.
Revenue from the health-care giant's pharmaceutical unit, its largest, jumped 15%, driven by its $30 billion purchase of a Swiss biotech firm earlier this year and new additions including Darzalex, which treats multiple myeloma, and a cancer therapy. Sales in the company's consumer segment, which includes Tylenol and Neutrogena beauty products, increased only modestly and slipped 0.5% in the U.S. Medical device sales rose 7%.
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J&J now guides for adjusted earnings per share for the year of $7.25 to $7.30, up from $7.12 to $7.22. It also raised its sales outlook to $76.1 billion to $76.5 billion, from $75.8 billion to $76.1 billion.
The New Brunswick, N.J., company, the world's largest seller of health products and one of the first to report its earnings each quarter, is seen as a bellwether for the industry. The company's shares rose 1.7% premarket Tuesday.
J&J's revenue rose 10% to $19.7 billion in its third quarter, topping what analysts polled by Thomson Reuters had expected. The company also beat on its bottom line, posting earnings per share of $1.90 on net income of $5.2 billion. Analysts had expected earnings per share of $1.80 on $4.9 billion.
Chief Executive Alex Gorsky said the company's pharmaceutical business and its recent purchase of Swiss company Actelion, in particular, fueled growth. That deal gave the company immediate access to a portfolio of rare disease treatments.
While acquiring new products and building its pipeline, J&J has been halting plans and trimming its reach elsewhere to accommodate expiring patents, price competition and changing consumer needs.
It said Tuesday it will not pursue global approvals of sirukumab for the treatment of rheumatoid arthritis and has discontinued research on talacotuzumab, an investigational compound that could treat acute myeloid leukemia.
Earlier this month, J&J abandoned its insulin pump business in the U.S. and Canada, and pledged to help transition its roughly 90,000 diabetes patients to Medtronic PLC's pumps instead. Medtronic commands about 65% of the insulin pump market, while analysts estimate J&J held 10%. Groups representing diabetes patients have said they are extremely concerned that J&J's decision will limit options and stunt innovation.
J&J is still evaluating options for its other diabetes businesses, including LifeScan Inc., which makes blood-glucose monitors, and OneTouch products.
The company also sold its Codman Neuro division to Integra LifeSciences Holdings Corp.
On an earnings call Tuesday morning, analysts are likely to ask J&J executives whether Hurricane Maria impacted manufacturing operations in Puerto Rico.
J&J shares this year are up 18%, in line with its peers.
Write to Cara Lombardo at firstname.lastname@example.org
(END) Dow Jones Newswires
October 17, 2017 08:07 ET (12:07 GMT)