NEW YORK – Johnson & Johnson (JNJ) Tuesday said its third-quarter profit rose almost 14 percent on higher sales of prescription drugs, but U.S. sales of medical devices slipped on competition from a rival heart device.
The New Brunswick, N.J.-based company raised its earnings forecast for 2004, predicting profit growth of almost 16 percent from last year, based upon overall sales trends and a tax rate at the low end of earlier expectations.
Chief Financial Officer Robert Darretta told industry analysts he expects J&J to earn between $3.05 and $3.07 per share in 2004, up from his earlier forecast of $3.03.
But Darretta cautioned that earnings growth will slow in 2005 as the company faces a number of challenges, including generic competition for its Duragesic (search) skin patch for pain.
"The business has been stronger than what we had anticipated at the start of the year, but we see somewhat slower rates of growth" in 2005, Darretta said.
He said J&J hopes to "achieve reasonable rates of earnings growth" next year, although specific forecasts will not be given until January. Wall Street is expecting profit to grow about 9 percent in 2005.
J&J reported a third-quarter profit of $2.35 billion, or 78 cents per share, compared with $2.07 billion, or 69 cents per share, in the year-ago period.
Analysts polled by Reuters Estimates, on average, had forecast earnings of 77 cents per share.
Global sales of prescription medicines rose 13.4 percent in the quarter to $5.5 billion, helped by growing demand for treatments for schizophrenia, pain, epilepsy and arthritis. But sales of anemia medicine Procrit (search) continued to slide amid competition from Amgen Inc.'s (AMGN) longer-acting Aranesp.
Drug sales would have risen only 11 percent if not for favorable foreign exchange factors.
Global sales of medical devices and diagnostics rose 7 percent to $4 billion. But they fell slightly in the United States as J&J's drug-coated Cypher stent (search) saw U.S. sales plunge 37 percent to $269 million amid competition from Boston Scientific Corp.'s (BSX) rival Taxus device used to prop open arteries after procedures to clear away plaque.