Johnson and Johnson, the world's second-biggest seller of health-care products, said third-quarter profit slipped 6.4 per cent as the company spent more to promote new drugs and lost sales to generic competition.
Net income dropped to $3.2 billion, or $1.15 a share, from $3.42 billion, or $1.23, a year earlier, the New Jersey-based company said in a statement.
Earnings adjusted for one-time items of $1.24 topped by 3 cents the average estimate of 16 analysts surveyed by Bloomberg. JandJ also raised the lower- end of its forecast for full-year profit.
Chief executive William Weldon won approvals for a quartet of drugs this year, including the prostate-cancer medicine Zytiga. While spending more to market those products, JandJ also faced generic rivals to the antibiotic Levaquin and attention deficit remedy Concerta. The two drugs generated almost 5 per cent of JandJ's revenue last year.
"When your US pharmaceutical business is down 6 per cent, that hurts," said Matt Miksic, a Piper Jaffray and Co. analyst in New York, in a telephone interview. "We were looking for weaker pharma, and it was weaker."
The numbers were offset by encouraging sales from outside the US, Mr Miksic said. Helped by currency-exchange rates, revenue grew in all three of JandJ's divisions - consumer- products, medical devices and drugs - for an overall increase of 16 per cent. Worldwide, sales climbed 6.8 per cent to $16 billion.
J&J has lost sales the last two years after recalling millions of defective over-the-counter medicines, hip implants and prescription drugs. In April, the company announced its biggest deal ever, the $20.3 billion purchase of orthopedics company Synthes, in part to offset slowing device sales.
Sales of over-the-counter products like Tylenol, which have slowly returned to the market this year, fell 9.4 per cent, not including the effects of currency-exchange rates, with a $106 million drop in the US. Overall,
J&J's consumer division, which also sells skin and baby-care products and other items, rose a half-percent, excluding currency rates.
Pharmaceutical sales jumped 8.9 percent to $5.98 billion. J&J's biggest unit, its medical-devices division, had a revenue increase of 6.1 per cent to $6.28 billion.
Sales were boosted by a weakened US dollar for most of the quarter, which increased the value of revenue earned outside the US, the company said.
Bloomberg
