Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

J&J profits, sales jump

Excluding charges, earnings beat analysts' expectations; weak U.S. dollar boosts overseas sales.

Subscribe to Companies
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Johnson & Johnson reported robust quarterly earnings on Tuesday, lifted by strong overseas sales that benefited from the weak U.S. dollar.

The company, a producer of drugs, consumer products and medical devices, said fourth-quarter net income jumped 10 percent to $2.4 billion, or 82 cents a share.

The results included charges related to the company's $16.6 billion purchase of Pfizer's consumer healthcare division in 2006.

Excluding those charges, earnings rose 7 percent to $2.5 billion, or 88 cents a share. Analysts surveyed by Thomson First Call had projected earnings of 86 cents a share.

Sales climbed 17 percent to $16 billion, beating the consensus analyst forecast of a rise to $15.4 billion.

For 2007, Johnson & Johnson's sales jumped 15 percent to $61.1 billion, while profit fell 4 percent to $10.6 billion.

Johnson & Johnson (JNJ, Fortune 500) shares fell slightly in midday trade on the New York Stock Exchange amid a broad-based decline for stocks.

Chief executive William Weldon told analysts during a conference call that the company was well positioned to take advantage of "dynamic changes" in healthcare over the next five to 10 years as the population continues to age.

Johnson & Johnson is bolstering its pipeline, with $7.7 billion spent on R&D in 2007, an 8 percent increase from the year before, he said.

Overseas sales were a bright spot, supported by the weak U.S. dollar. In Europe, sales surged 25 percent during the quarter. In Africa and Asia-Pacific, sales climbed 20 percent. By comparison, U.S., sales rose 9 percent.

The company is finding ways to make products more attractive in international markets, said Weldon. For example, the CEO said that fruit-flavored nicotine gum was particularly popular among Asian smokers.

Les Funtleyder, analyst for Miller Tabak, called the company a "safe haven" stock with the potential to launch new products in 2009 and 2010. But Funtleyder, who has a "neutral" rating on the stock, also said that "lackluster products" were impeding near-term growth.

Johnson & Johnson said its growth was "negatively impacted" by reduced sales for Procrit, an anti-anemia treatment used in conjunction with chemotherapy.

But Weldon defended Procrit. "We think we will be able to drive [Procrit sales] and we have a strong commitment to it," he said.

Procrit, and similar drugs Epogen and Aranesp from the biotech Amgen (AMGN, Fortune 500), have been dogged by safety concerns. Last March, the FDA added a warning to the product labels because of increased risk of death in some cancer patients. FDA advisory committees met twice last year to limit the pool of patients who can use these drugs, and another regulatory panel will meet in March.

Johnson & Johnson has submitted to U.S. and European regulators potential drugs for the treatment of schizophrenia, psoriasis, muliple myeloma, HIV infection and sexual dysfunction.

Johnson & Johnson, based in New Jersey, is the largest producer of pharmaceuticals in terms of annual sales, though it also sells consumer products. New York-based Pfizer (PFE, Fortune 500) is the largest company that draws all or most of its sales from drugs. To top of page

Photo Galleries
Super Bowl bound? Things to do in Houston besides the big game If you're one of the thousands of fans are headed to Houston for the Super Bowl Sunday, here are five things to do when you're not at the stadium. More
Sneak peek at Super Bowl 51 ads The ghost of Spuds MacKenzie and an ad about immigration steal the show in the swell of upcoming Super Bowl ads. Advertisers are paying, on average, $5 million for 30-second spots during Sunday's game on Fox. But if you want to watch something other than commercials, the New England Patriots happen to be playing the Atlanta Falcons. More
Most expensive cars from the Scottsdale collector car auctions The ten most expensive cars sold at the annual Arizona collector auctions went or a total of $44 million. More
Sponsors