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The pain of the
recession is easing a bit for New
Brunswick-based Tylenol and Band-Aid
maker Johnson & Johnson, which on
Tuesday reported a healthy jump in
fourth-quarter sales and gave a fairly
upbeat forecast for this year.
But profit for the just-ended quarter
was down due to a whopping charge — $1.1
billion before taxes — for its biggest
restructuring ever, a program that will
eliminate up to 8,000 jobs, or nearly 7
percent of the work force.
The world's
largest maker of health care products
said sales rose 9 percent to $16.55
billion, but profit dropped 19 percent
to $2.21 billion, or 79 cents per share.
Excluding one-time items, the company
reported earnings per share of $1.02.
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Analysts
polled by Thomson Reuters on
average were expecting revenue
of $15.7 billion and earnings
per share of 97 cents, excluding
items.
Despite
beating that forecast, its
shares fell 55 cents to $62.67
in morning trading.
Sales had fallen over the prior
year as the recession pushed
penny-pitching consumers to buy
cheaper store brands instead of
J&J bandages and nonprescription
medicines. Meanwhile, sales of
some of its blockbuster
prescription drugs have been
slashed by generic competition,
and a drop in elective surgical
procedures at hospitals had been
cutting into sales of medical
devices.
Chief
Executive Bill Weldon told analysts
on a conference call that the
company's results were "impressive"
given "a soft economy and the rise
of private-label brands" worldwide,
plus the loss of $3 billion in sales
due to generic competition.
He called 2009
"one of the most difficult years in
our company's history," noting that
J&J posted its first yearly sales
decline in 76 years, had to decide
to eliminate so many jobs and is
dealing with a major recall of
Tylenol and other products that has
led it to review its internal
processes.
"I think we're
on a really strong trajectory," with
promising new products on the
horizon and health spending climbing
steadily in many populous countries,
Weldon added.
In the fourth
quarter, sales of consumer products
rebounded strongly, climbing 10
percent to $4.25 billion. Most of
that improvement came overseas.
Sales of prescription drugs were up
just over 5 percent at $5.99
billion, with growth in other
countries offsetting a small decline
here. The medical devices and
diagnostics division, now J&J's
largest, saw the biggest
improvement, a 12 percent jump in
sales to $6.31 billion.
The company also
gave its first profit forecast for
2010: $4.85 to $4.95 per share,
excluding one-time items. That's up
about 10 percent from J&J
performance in 2009.
"Johnson &
Johnson remains a company that is
financially strong and we are well
positioned for growth," said Chief
Financial Officer Dominic Caruso.
For the full
year, the company reported net
income of $12.27 billion, or $4.40
per share, down 5 percent from
$12.95 billion, or $4.57 per share.
Sales slipped 3 percent to $61.9
billion from $63.75 billion.
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