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J&J Increases Sales to $17 Billion, But Consumer Product Sales Drop

Posted: October 16, 2012

Johnson & Johnson announced sales of $17.1 billion for the third quarter of 2012, an increase of 6.5% as compared to the third quarter of 2011. Operational results increased 10.8% and the negative impact of currency was 4.3%. Domestic sales increased 13.4%, and international sales increased 1.4%, reflecting operational growth of 8.9% and a negative currency impact of 7.5%. Sales included the impact of the recently completed acquisition of Synthes, Inc., which contributed 5.8% to worldwide operational sales growth, net of the divestiture of the DePuy trauma business.

Net earnings and diluted earnings per share for the third quarter of 2012 were $3 billion and $1.05, respectively. Third-quarter 2012 net earnings included after-tax special items of $553 million, primarily consisting of a non-cash net charge related to in-process research and development. Third-quarter 2011 net earnings included an after-tax special item of $241 million, consisting of a mark-to-market adjustment to the value of the currency option and deal costs related to the acquisition of Synthes, Inc. Excluding these special items, net earnings for the current quarter were $3.5 billion and diluted earnings per share were $1.25, representing increases of 2.3% and 0.8%, respectively, as compared to the same period in 2011.

“Our third-quarter results reflected continued sales momentum driven by strong growth of key products, successful new product launches, and the addition of Synthes to our family of companies. We advanced our pipelines with regulatory approvals for a number of new products, the submission of several new drug applications, and the completion of several strategic collaborations,” said Alex Gorsky, J&J’s CEO. “I’m extremely proud of our talented and dedicated colleagues throughout Johnson & Johnson, and I have great confidence in our ability to deliver sustainable growth and bring meaningful innovations to patients and customers around the world.”

The company updated its earnings guidance for full-year 2012 to $5.05–5.10 per share, and this guidance excludes the impact of special items.

Divisionally, J&J’s worldwide consumer segment saw sales of $3.6 billion for the third quarter, which represented a decrease of 4.3% versus the prior year consisting of an operational increase of 1% and a negative impact from currency of 5.3%. Domestic sales decreased 0.4%, while international sales decreased 6.1%, which reflected an operational increase of 1.8% and a negative currency impact of 7.9%.

Positive contributors to operational results were sales of upper respiratory over-the-counter products; international sales of Listerine oral care products; and Neutrogena skin care products.

Helping buoy the results, the company’s worldwide pharmaceutical division saw sales of $6.4 billion for the third quarter, which represented an increase of 7% versus the prior year with operational growth of 11.3% and a negative impact from currency of 4.3%. Domestic sales increased 14.6%, while international sales were flat and reflected an operational increase of 8.2% offset by a negative currency impact of 8.2%.

Get more information about J&J’s third quarter 2012 financial results here.