J&J third-quarter profit beats as drugs, devices deliver

Johnson & Johnson reported better-than-expected quarterly results on Tuesday, as prescription drug sales rebounded with the help of newer products and jitters about medical device sales proved unfounded.

"Things can't help but look more positive for the company with today's results," said Piper Jaffray analyst Matt Miksic, who noted it was the first time in a year that J&J had beaten Wall Street sales estimates.

Earnings per share before special items topped expectations, and revenue also beat Wall Street estimates.

Third-quarter global sales of prescription drugs jumped 7 percent to $6.4 billion, helped by leaping sales of new prostate cancer drug Zytiga and double-digit gains for J&J treatments for cancer, arthritis, psoriasis and HIV.

Miksic said investors had feared that sales of medical devices and diagnostics would flag in the quarter because rival Edwards Lifesciences Corp earlier this month cut its quarterly revenue forecast on weaker-than-expected heart valve sales.

But global sales of J&J's medical device business rose 12.5 percent to $7.1 billion despite the negative effects of foreign exchange. The result was helped by devices to treat trauma, which were acquired through its recent purchase of Synthes Inc.

"Investors were concerned there would be a softening of demand for devices," Miksic said, especially in Europe, "but there was no evidence of that. So right out of the gate, we'll see a recovery of faith in devices" throughout the industry, he predicted.

The company earned $3.0 billion, or $1.05 per share, in the third quarter, compared with $3.2 billion, or $1.15 per share, in the year-earlier period.

Excluding special items, the diversified healthcare company earned $1.25 per share. Analysts, on average, expected $1.21 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 6.5 percent to $17.1 billion, topping Wall Street expectations of $16.97 billion. Sales would have risen 10.8 percent if not for the stronger dollar, which hurts the value of revenues in overseas markets.

J&J slightly raised its full-year profit forecast to between $5.05 and $5.10 per share from $5.00 to $5.07 per share.

Company shares rose 1.5 percent to $69.66.

(Reporting by Ransdell Pierson; Editing by Gerald E. McCormick and Jeffrey Benkoe)