Johnson & Johnson (J&J) yesterday reported disappointing quarterly revenue as sales of US consumer products plunged 25 per cent following recalls of Tylenol and other consumer brands.
Although J&J reported better-than-expected quarterly earnings, analysts said the profit performance was largely due to lower taxes and one-off items.
“There was more of a decline in the consumer business than we had expected and not as strong a showing in the medical device business,” Nobel Financial Capital analyst Jan Wald said.
The diversified healthcare company earned $3.42bn (£2.18bn), or $1.23 per share, in the third quarter. That compared with $3.35bn (£2.16bn), or $1.20 per share, a year earlier.
Global company revenue fell 0.7 per cent to $14.98bn, shy of Wall Street forecasts of $15.19bn.
J&J raised its full-year profit forecast to between $4.70 and $4.80 per share, from its prior view of $4.65 to $4.75 per share, citing the weaker dollar – which raises the value of sales in overseas markets.
Global sales of consumer products fell 10.6 per cent to $3.57bn. Sales of the consumer brands plunged 25 per cent in the US, where tens of millions of bottles of Tylenol and other consumer medicines have been recalled in the past year due to quality control lapses – including mouldy odours in the products and overly high dosages of active ingredients.
The company is facing a US congressional probe of the repeated recalls of Tylenol, painkiller Motrin and allergy treatment Benadryl – including alleged “phantom” recalls which J&J failed to disclose to the public.
City A.M. Reporter