Johnson & Johnson, the world's biggest maker of health care products, reported third-quarter profit that beat analyst estimates as newer drugs continue to propel the company to faster growth than competitors. J&J raised its full-year forecast. Earnings excluding one-time items of $1.36 a share beat the $1.32 average of 17 analysts' estimates compiled by Bloomberg. Net income of $2.98 billion, or $1.04 a share, was little changed from $2.97 billion, or $1.05, a year earlier, the New Brunswick, New Jersey-based company said on Tuesday.
Medicines introduced since 2011 include blood thinner Xarelto and prostate cancer treatment Zytiga. J&J has boosted its pharmaceutical business while Pfizer Inc has spun off units, Abbott Laboratories has split, and Merck & Co has cut 20 per cent of its workforce. Sales of J&J's consumer products, including pain relievers such as Tylenol, also have gained as previously recalled products return to store shelves.
"Most of the key new drugs are performing better than we expected," wrote Lawrence Biegelsen, an analyst with Wells Fargo in New York, in an October 11 note to clients. "We also expect to see continued momentum in J&J's consumer business as the company re-launches its over-the-counter drugs after a series of recalls."
The company raised its earnings forecast for 2013 to $5.44 to $5.49 a share, from its July outlook of $5.40 to $5.47 a share. Revenue increased to $17.6 billion from $17.1 billion a year earlier, the 11th straight quarter of growth.
The Patient Protection and Affordable Care Act of 2010 will cost J&J about $1 billion this year, said Tony Butler, an analyst with Barclays Plc. The law, intended to help provide health coverage for some of the 48 million uninsured Americans, will weigh on the company because of rebates in the government's Medicaid programme for the poor, drug cost cuts in the Medicare programme for the elderly, and a 2.3 per cent excise tax on medical device sales.
Johnson & Johnson rose less than 1 per cent to $89.80 on Monday in New York trading. The shares have gained 28 per cent this year.
