Johnson & Johnson Reports Consistent Growth

Johnson & Johnson reported better-than-expected third-quarter earnings on Tuesday, as strong growth for prescription drugs overshadowed weaker contributions from its medical device and consumer products businesses.

"The company's pharmaceuticals division is really well placed with lots of new drug launches at a time when the company is not facing many patent expirations on its other medicines," a Morningstar analyst, Damien Conover, said. "And we expect to see more of this strength in the next several quarters."

Global drug revenue jumped almost 10 percent to $7.04 billion.

But sales of the company's medical devices were hurt by patients' continuing reluctance to undergo elective surgeries and other procedures in a weak economy. Division sales fell 2 percent to $6.93 billion.

"The weakness in devices appears to be broad-based, with not just one thing bringing them down," Judson Clark, an analyst at Edward Jones said, adding that the unit's weakest category was medical diagnostics.

J.& J.'s chief financial officer, Dominic J. Caruso, said on a conference call with analysts and investors that there had been a pickup in overall economic activity, "but certainly not to the level we had hoped."

Johnson & Johnson reported net earnings of $2.98 billion, or $1.04 a share, for the third quarter, compared with $2.97 billion, or $1.05 a share a year earlier.

Excluding one-time items, J.& J. earned $1.36 a share. Analysts on average, had expected $1.32 a share, according to a survey by Thomson Reuters. The company took special charges of about $900 million in the quarter, related largely to legal expenses and merger-related costs.

Overall company sales rose 3.1 percent to $17.58 billion in the quarter, above Wall Street expectations of $17.46 billion, but would have risen 4.7 percent if not for the stronger dollar.

J.& J. said it expected earnings this year, excluding special items, of $5.44 to $5.49 a share, up from its previous view of between $5.40 to $5.47. The company earned $5.10 a share last year.

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