Johnson & Johnson cheers turnaround in its prescription medication business

City A.M. Reporter
DRUGS firm Johnson & Johnson reported better than expected earnings yesterday due to an upswing for its prescription medicines.

Stabilising sales of over-the-counter medicines also aided the results, after several years of recalls due to quality control lapses.

Results were also greatly helped by the weaker dollar, which boosts the value of sales in overseas markets, and sharply lower taxes.

The diversified healthcare company said it had net earnings in the second quarter of $2.78bn (£1.72bn) compared with $3.45bn in the year-earlier period.

Excluding special items, J&J earned $1.28 per share -- topping the average forecast of $1.24 per share among analysts.

Company sales jumped 8.3 per cent to $16.6bn, surpassing Wall Street’s expectations of $16.23bn – although sales would have risen only 2.6 per cent if not for the weaker dollar.

Despite the profit and sales beats in the quarter, J&J stuck to its full-year profit view of $4.90 to $5 per share. That would reflect growth of up to five per cent from last year’s results.

Global sales of prescription drugs jumped 12.2 per cent to $6.23bn.

Sales of consumer products, including over-the-counter drugs, rose four per cent to $3.79bn.

Shares in the US firm rose as much as 11 per cent after the results announcement.