Johnson & Johnson's sales miss; seeks options for diabetes care unit
Reuters
Published Jan 24, 2017 08:38AM ET
Johnson & Johnson's sales miss; seeks options for diabetes care unit
(Reuters) - Johnson & Johnson (N:JNJ) reported a smaller-than-expected rise in fourth-quarter sales, hurt by slowing demand for its pharmaceutical products and a strong dollar, and said it was looking at strategic options for its diabetes care division.
Shares of the diversified healthcare company, which also forecast 2017 earnings and revenue below estimates, slipped 1.2 percent in premarket trading on Tuesday.
J&J is seeking strategic options for its diabetes care division, specifically LifeScan Inc, Animas Corp and Calibra Medical Inc, as the company looks to rejuvenate its aging legacy portfolio.
The division falls within J&J's medical device business, which is the company's second-biggest division. The diabetes unit accounted for 2.5 percent of total sales in the latest quarter.
J&J's total sales rose 1.7 percent to $18.11 billion in the fourth quarter, but missed analysts' average estimate of $18.28 billion, according to Thomson Reuters I/B/E/S.
A slower-than-expected rise in sales in the company's pharmaceutical business weighed on the quarter.
Sales of its cancer drugs, Imbruvica and Velcade, were below consensus estimates, according to Jefferies analysts.
Another drag was a drop in sales of Remicade, the company's top-seller. Sales of the autoimmune drug fell 3.3 percent in the quarter, dropping for the first time in 2016, but was in line with consensus estimates.
The drug now faces competition in the United States from Pfizer Inc's (N:PFE) biosimilar, Inflectra, which was launched on Nov. 21, midway through the quarter, at a 15 percent lower price.
Sales in the latest quarter took a hit of 0.6 percent due to a strong dollar and another 4.8 percent due to additional shipping days in the year-ago quarter, the company said.
This is a tepid quarter for J&J, and most of its disappointments came from the U.S. market, both before and after currency, Leerink analysts said.
Excluding items, the band-aid maker earned $1.58 per share, beating analysts' average estimate by 2 cents, helped by lower taxes.
J&J forecast 2017 adjusted earnings of $6.93-$7.08 per share and revenue of $74.1 billion-$74.8 billion.
Analysts on average were expecting a profit of $7.11 per share and revenue of $75.10 billion.
The company is currently in exclusive talks to buy Actelion Ltd (S:ATLN), Europe's biggest biotech, and last September agreed to pay $4.33 billion to buy Abbott Laboratories' (N:ABT) eye-care business.
Get The News You Want
J&J's report, the first among major pharmaceutical companies, comes on the heels of President Donald Trump's scathing remarks on drug price gouging.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.