US DRUG giant Johnson Johnson posted a 5 per cent drop in second-quarter earnings yesterday, but profit and revenue beat analysts’ forecasts thanks to surprisingly resilient pharmaceutical and consumer product sales.

Revenue took a hit from patent expirations on its drugs for schizophrenia and epilepsy, but sales of its blockbuster arthritis drug Remicade were better than expected. Analysts also cited the ability of the giant diversified healthcare company, shares of which rose slightly, to contain costs.

“They went through a cost-cutting exercise about a year and a half ago, and it’s definitely helping them with their earnings to date,” said Jan Wald, an analyst with Noble Financial. “The surprise is more on the revenue side . . . and that bodes well.”

The company, which makes products ranging from Band-Aids to complex biotechnology medicines and which recently took an 18.4 per cent stake in Irish group Elan, earned $3.21 billion (€2.3 billion), or $1.15 per share, for the second quarter. That compares with $3.37 billion, or $1.18 per share, in the year-earlier period, ahead of expectations.

JJ’s quarterly revenue fell 7.4 per cent to $15.24 billion, but was $190 million higher than analysts had expected. Revenue would have been 6 percentage points higher if not for the stronger dollar, which hurts the value of overseas sales. Some analysts had expected a worse toll from currency.

The company reaffirmed its full-year profit forecast of $4.45 per share to $4.55 per share, excluding special items, which would be little changed from last year. – (Bloomberg)