Restrained spending and a sizeable one-time gain helped health giant Johnson & Johnson post a 4.4 percent increase in second-quarter profit, despite lower sales in all three business segments and in every region as unfavorable currency exchange rates shaved revenue.
However, the world's biggest maker of health care products managed to beat Wall Street's modest expectations and raised its 2014 adjusted profit forecast for the second time since January, again by a nickel to a range of $5.85 to $5.92 per share. That excludes one-time items.
In a significant turnaround, its consumer health business in the U.S., which has been hurt by massive recalls since 2009 that kept many products off store shelves for years, was the only division to report higher sales. They were up 2.7 percent at $1.36 billion, despite lower sales for normally popular and steady categories including wound, skin and baby care products.
That business has steadily recovered and resumed selling most of its consumer products, though a huge factory in Fort Washington, Pennsylvania, that had to be gutted and rebuilt still hasn't begun manufacturing.
J&J, the maker of Band-Aids, medical devices and biologic drugs on Tuesday reported net income amounting to $1.61 per share. Adjusted for writedowns and other non-recurring costs, that came to $1.71 per share for a two-cent beat over the average estimate of 11 analysts surveyed by Zacks Investment Research.
The company posted a one-time gain of $931 million, from the recent divestiture of painkiller Nucynta and other special charges. The divestitures in the quarter included its K-Y lubricants and its Savlon wound care business.
The New Brunswick, New Jersey-based company posted revenue of $17.79 billion in the period, also surpassing Street forecasts for $17.7 billion.
Sales were cut by the prior sale of J&J's Ortho Clinical Diagnostics business and a big drop from its hepatitis C drug Olysio, as rival drugs Harvoni, Sovaldi and Viekira Pak have completely taken over the market.
Sales fell 7 percent to $3.5 billion for consumer health care, 6.6 percent to $7.9 billion for prescription drugs and 12.2 percent to $6.4 billion for medical devices and diagnostic equipment.
"Our solid sales and earnings results in the quarter reflect the strong underlying growth we're seeing across the enterprise," CEO Alex Gorsky said in a statement.
Johnson & Johnson expects full-year earnings in the range of $6.10 to $6.20 per share.
Its shares have declined 4 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed 2 percent.
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