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View printer-friendly version < < backNEW BRUNSWICK, N.J., Oct 16, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Johnson & Johnson (NYSE: JNJ) today announced third-quarter sales of $15.0 billion, an increase of 12.7% as compared to the third quarter of 2006. Operational growth was 9.7% and currency contributed 3.0%. Domestic sales were up 5.8%, while international sales increased 21.5%, reflecting operational growth of 14.7% and a positive currency impact of 6.8%. On a pro-forma basis, including the net impact of the acquisition of Pfizer Consumer Healthcare in both periods, worldwide sales increased 2.4% operationally.
Net earnings and diluted earnings per share for the third quarter of 2007 were $2.5 billion and $.88, representing decreases of 7.7% and 6.4%, respectively, compared to the same period in 2006. Net earnings for the third quarter included an after-tax restructuring charge of $528 million associated with the cost improvement program previously announced on July 31st. Prior- year third-quarter net earnings included after-tax in-process research and development charges of $115 million associated with the acquisitions of Ensure Medical, Inc. and Colbar LifeScience Ltd. Excluding the impact of these charges, net earnings for the current quarter were $3.1 billion and diluted earnings per share were $1.06, representing increases of 7.0% and 8.2%, respectively, as compared to the same period in 2006.* The Company increased its earnings guidance for full-year 2007, which excludes the impact of in- process research and development charges, restructuring charges or other special items, to between $4.10 and $4.13 per share.
"We continue to deliver solid earnings while investing in the future growth of our business," said William C. Weldon, Chairman and Chief Executive Officer. "Our broad base enables us to pursue opportunities while managing through pressures in certain markets."
Worldwide Medical Devices and Diagnostics sales of $5.2 billion for the third quarter represented a 6.0% increase over the prior year with operational growth of 3.0% and a positive impact from currency of 3.0%. Domestic sales increased 2.4%, while international sales increased 9.8% (3.7% from operations and 6.1% from currency).
Primary contributors to the operational growth included Vistakon's disposable contact lenses; LifeScan's blood glucose monitoring and insulin delivery products; DePuy's orthopaedic joint reconstruction and sports medicine products; Ethicon Endo-Surgery's minimally invasive products; and Ortho-Clinical Diagnostics' professional diagnostic products. Also contributing to the results was strong growth in Biosense Webster's electrophysiology business and in Ethicon's wound care and women's health businesses. Growth was impacted by lower sales of drug-eluting stents in our Cordis franchise primarily due to a decline in the market versus the prior year.
During the quarter, the Company received approval from the U.S. Food and Drug Administration (FDA) for the REALIZE Adjustable Gastric Band, a surgical implant for the treatment of morbid obesity. The FDA also approved the GENESEARCH Breast Lymph Node Assay, which is the first intra-operative and gene-based test to detect the spread of breast cancer into the lymph nodes.
Worldwide Pharmaceutical sales of $6.1 billion for the third quarter represented an increase over the prior year of 3.7% with operational growth of 1.2% and a positive impact from currency of 2.5%. Domestic sales decreased 2.0%, while international sales increased 14.4% (7.2% from operations and 7.2% from currency).
Sales growth reflects the strong performance of TOPAMAX, an antiepileptic and a treatment for the prevention of migraine headaches; our antipsychotic franchise, which includes RISPERDAL, RISPERDAL CONSTA and INVEGA; and REMICADE, a biologic approved for the treatment of a number of immune mediated inflammatory diseases. Growth was impacted by lower sales of PROCRIT, a product for the treatment of anemia, primarily due to a decline in the market. This market decline is related to a labeling change made this past March and a decision memorandum issued by the Centers for Medicare & Medicaid Services under its national coverage analysis process.
In October, the Company received approval from the FDA for DORIBAX (doripenem for injection) as a new treatment for complicated intra-abdominal and complicated urinary tract infections, including pyelonephritis. During the quarter, the Company filed a new drug application in both the U.S. and Europe for TMC125 (etravirine), an investigational non-nucleoside reverse transcriptase inhibitor (NNRTI), being studied for use with other antiretroviral agents as a treatment for people infected with HIV-1.
Worldwide Consumer segment sales of $3.6 billion for the third quarter represented a 47.5% increase over the prior year with operational growth of 43.4% and a positive impact from currency of 4.1%. Domestic sales increased 39.8%, while international sales increased 54.2% (46.5% from operations and 7.7% from currency). On a pro-forma basis, including the net impact of the acquisition of Pfizer Consumer Healthcare in both periods, worldwide sales for the Consumer segment increased 3.5% operationally.
Sales growth in the combined business reflects the strong performance of the LISTERINE antiseptic mouthrinse and the launch of whitening products; the skin care lines of AVEENO, CLEAN & CLEAR, and NEUTROGENA; McNeil Nutritional's SPLENDA sweetener; and Baby and Kids Care products. In October, the Company announced it was voluntarily withdrawing certain infants' cough and cold products from the market. An assessment of available data on the use of pediatric cough and cold medicines identified rare instances of misuse leading to overdose, particularly in infants under 2 years of age. When used as directed, these medicines are generally recognized as safe and effective.
Johnson & Johnson is the world's most comprehensive and broadly based manufacturer of health care products, as well as a provider of related services, for the consumer, pharmaceutical, and medical devices and diagnostics markets. The more than 250 Johnson & Johnson operating companies employ approximately 120,000 men and women in 57 countries and sell products throughout the world.
* Net earnings and diluted earnings per share excluding after-tax in-
process research and development charges and restructuring charges are
non-GAAP financial measures and should not be considered replacements
for GAAP results. For a reconciliation of these non-GAAP financial
measures to the most directly comparable GAAP financial measures, see
the accompanying tables to this release.
NOTE TO INVESTORS
Johnson & Johnson will conduct a meeting with financial analysts to discuss this news release today at 8:30 a.m., Eastern Daylight Time. A simultaneous webcast of the call for interested investors and others may be accessed by visiting the Johnson & Johnson website at www.investor.jnj.com. A replay and podcast will be available approximately two hours after the live webcast by visiting www.investor.jnj.com.
Copies of the financial schedules accompanying this press release are available at http://www.investor.jnj.com/historical-sales.cfm. The schedules include supplementary sales data, a condensed consolidated statement of earnings, and sales of key products/franchises. Additional information on Johnson & Johnson can be found on the Company's website at http://www.jnj.com.
(This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from Johnson & Johnson's expectations and projections. Risks and uncertainties include general industry conditions and competition; economic conditions, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; domestic and foreign health care reforms and governmental laws and regulations; and trends toward health care cost containment. A further list and description of these risks, uncertainties and other factors can be found in Exhibit 99 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006. Copies of this Form 10-K, as well as subsequent filings, are available online at www.sec.gov, www.jnj.com or on request from Johnson & Johnson. Johnson & Johnson does not undertake to update any forward- looking statements as a result of new information or future events or developments.)
Johnson & Johnson and Subsidiaries
Supplementary Sales Data
(Unaudited; Dollars in Millions) THIRD QUARTER
Percent
Change
Operat
2007 2006 Total -ions Currency
Sales to customers
by segment of business
Consumer
U.S. $1,591 1,138 39.8 % 39.8 -
International 2,032 1,318 54.2 46.5 7.7
3,623 2,456 47.5 43.4 4.1
Pharmaceutical
U.S. 3,765 3,841 (2.0) (2.0) -
International 2,334 2,040 14.4 7.2 7.2
6,099 5,881 3.7 1.2 2.5
Med Devices & Diagnostics
U.S. 2,569 2,509 2.4 2.4 -
International 2,679 2,441 9.8 3.7 6.1
5,248 4,950 6.0 3.0 3.0
U.S. 7,925 7,488 5.8 5.8 -
International 7,045 5,799 21.5 14.7 6.8
Worldwide $14,970 13,287 12.7 % 9.7 3.0
(Unaudited; Dollars in Millions) NINE MONTHS
Percent
Change
Operat
2007 2006 Total -ions Currency
Sales to customers by
segment of business
Consumer
U.S. $4,782 3,391 41.0 % 41.0 -
International 5,901 3,818 54.6 48.1 6.5
10,683 7,209 48.2 44.8 3.4
Pharmaceutical
U.S. 11,659 11,224 3.9 3.9 -
International 6,810 6,093 11.8 5.6 6.2
18,469 17,317 6.7 4.5 2.2
Med Devices & Diagnostics
U.S. 7,772 7,619 2.0 2.0 -
International 8,214 7,497 9.6 4.3 5.3
15,986 15,116 5.8 3.2 2.6
U.S. 24,213 22,234 8.9 8.9 -
International 20,925 17,408 20.2 14.3 5.9
Worldwide $45,138 39,642 13.9 % 11.3 2.6
Johnson & Johnson and Subsidiaries
Supplementary Sales Data
(Unaudited; Dollars in Millions) THIRD QUARTER
Percent
Change
Operat
2007 2006 Total -ions Currency
Sales to customers
by geographic area
U.S. $7,925 7,488 5.8 % 5.8 -
Europe 3,765 3,098 21.5 13.3 8.2
Western Hemisphere excluding U.S. 1,195 901 32.6 24.9 7.7
Asia-Pacific, Africa 2,085 1,800 15.8 11.8 4.0
International 7,045 5,799 21.5 14.7 6.8
Worldwide $14,970 13,287 12.7 % 9.7 3.0
(Unaudited; Dollars in Millions) NINE MONTHS
Percent
Change
Operat
2007 2006 Total -ions Currency
Sales to customers
by geographic area
U.S. $24,213 22,234 8.9 % 8.9 -
Europe 11,485 9,464 21.4 13.1 8.3
Western Hemisphere excluding U.S. 3,372 2,599 29.7 25.2 4.5
Asia-Pacific, Africa 6,068 5,345 13.5 11.2 2.3
International 20,925 17,408 20.2 14.3 5.9
Worldwide $45,138 39,642 13.9 % 11.3 2.6
Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings
(Unaudited; in Millions
Except Per Share Figures) THIRD QUARTER
2007 2006
Percent Percent Percent
to to Increase
Amount Sales Amount Sales (Decrease)
Sales to customers $14,970 100.0 $13,287 100.0 12.7
Cost of products sold 4,274 28.5 3,650 27.5 17.1
Selling, marketing and
administrative expenses 4,899 32.7 4,291 32.3 14.2
Research expense 1,834 12.3 1,719 12.9 6.7
In-process research &
development (IPR&D) - - 115 0.9
Restructuring expense 745 5.0 - -
Interest (income)expense, net (52) (0.3) (194) (1.5)
Other (income)expense, net 2 - 45 0.3
Earnings before provision for
taxes on income 3,268 21.8 3,661 27.6 (10.7)
Provision for taxes on income 720 4.8 901 6.8 (20.1)
Net earnings $2,548 17.0 $2,760 20.8 (7.7)
Net earnings per share
(Diluted) $0.88 $0.94 (6.4)
Average shares outstanding
(Diluted) 2,912.9 2,948.1
Effective tax rate 22.0 % 24.6 %
Adjusted earnings before
provision for taxes and net
earnings
Earnings before
provision for taxes on
income $4,013 (1) 26.8 $3,776 (2) 28.4 6.3
Net earnings $3,076 (1) 20.5 $2,875 (2) 21.6 7.0
Net earnings per share
(Diluted) $1.06 (1) $0.98 (2) 8.2
Effective tax rate 23.3% 23.9%
(1) The difference between as reported earnings and as adjusted earnings
before provision for taxes on income, net earnings and net earnings
per share (diluted) is the exclusion of the restructuring expense of
$745 million, $528 million and $0.18 per share, respectively.
(2) The difference between as reported earnings and as adjusted earnings
before provision for taxes on income, net earnings and net earnings
per share (diluted) is the exclusion of IPR&D of $115 million with no
tax benefit and $0.04 per share, respectively.
Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings
(Unaudited; in Millions Except
Per Share Figures) NINE MONTHS
Percent Percent Percent
to to Increase
Amount Sales Amount Sales (Decrease)
Sales to customers $45,138 100.0 $39,642 100.0 13.9
Cost of products sold 13,017 28.8 11,050 27.9 17.8
Selling, marketing and
administrative expenses 14,730 32.6 12,737 32.1 15.6
Research expense 5,352 11.9 5,079 12.8 5.4
In-process research &
development (IPR&D) 807 1.8 239 0.6
Restructuring expense 745 1.7 - -
Interest (income)expense, net (121) (0.3) (571) (1.4)
Other (income)expense, net (343) (0.8) (771) (2.0)
Earnings before provision for
taxes on income 10,951 24.3 11,879 30.0 (7.8)
Provision for taxes on income 2,749 6.1 2,994 7.6 (8.2)
Net earnings $8,202 18.2 $8,885 22.4 (7.7)
Net earnings per share
(Diluted) $2.81 $2.99 (6.0)
Average shares outstanding
(Diluted) 2,919.3 2,971.3
Effective tax rate 25.1 % 25.2 %
Adjusted earnings before
provision for taxes and net
earnings
Earnings before provision
for taxes on income $12,503 (1) 27.7 $11,496 (2) 29.0 8.8
Net earnings $9,537 (1) 21.1 $8,748 (2) 22.1 9.0
Net earnings per share
(Diluted) $3.27 (1) $2.95 (2) 10.8
Effective tax rate 23.7% 23.9%
(1) The difference between as reported earnings and as adjusted earnings
before provision for taxes on income, net earnings and net earnings
per share (diluted) is the exclusion of IPR&D of $807 million with no
tax benefit and $0.28 per share respectively, and the exclusion of the
restructuring expense of $745 million, $528 million and $0.18 per
share, respectively.
(2) The difference between as reported earnings and as adjusted earnings
before provision for taxes on income, net earnings and net earnings
per share (diluted) is the exclusion of the Guidant acquisition
termination fee of $622 million, $368 million and $0.12 per share,
respectively, and the exclusion of IPR&D of $239 million, $231
million and $0.08 per share, respectively.
REPORTED SALES vs. PRIOR PERIOD
$MM
CURRENT QUARTER
% Change
3Q 2007 3Q 2006 Reported Operational(1) Currency
PHARMACEUTICAL SEGMENT (2)
ACIPHEX/PARIET
US 159 146 8.4% 8.4% -
Intl 179 161 11.6% 4.0% 7.6%
WW 338 307 10.1% 6.1% 4.0%
Anti-Psychotics (3)
US 674 635 6.3% 6.3% -
Intl 488 433 12.8% 5.6% 7.2%
WW 1,162 1,068 8.9% 6.0% 2.9%
CONCERTA
US 177 179 -1.2% -1.2% -
Intl 54 41 34.0% 24.8% 9.2%
WW 231 220 5.3% 3.6% 1.7%
DURAGESIC
US 107 138 -23.0% -23.0% -
Intl 202 204 -0.7% -6.5% 5.8%
WW 309 342 -9.7% -13.2% 3.5%
EPREX/PROCRIT
US 380 522 -27.1% -27.1% -
Intl 302 276 9.0% 1.0% 8.0%
WW 682 798 -14.6% -17.4% 2.8%
Hormonal Contraceptives
US 166 210 -21.2% -21.2% -
Intl 67 60 11.9% 4.1% 7.8%
WW 233 270 -13.9% -15.6% 1.7%
LEVAQUIN
US 351 341 3.1% 3.1% -
Intl 15 9 65.0% 61.1% 3.9%
WW 366 350 4.6% 4.5% 0.1%
REMICADE
US 648 602 7.5% 7.5% -
Intl 171 174 -1.4% -1.4% -
WW 819 776 5.5% 5.5% -
TOPAMAX
US 498 435 14.4% 14.4% -
Intl 115 98 17.5% 9.7% 7.8%
WW 613 533 15.0% 13.6% 1.4%
YEAR TO DATE
% Change
3Q 2007 3Q 2006 Reported Operational(1) Currency
PHARMACEUTICAL SEGMENT (2)
ACIPHEX/PARIET
US 479 438 9.3% 9.3% -
Intl 531 483 9.9% 3.4% 6.5%
WW 1,010 921 9.7% 6.3% 3.4%
Anti-Psychotics (3)
US 2,037 1,788 13.9% 13.9% -
Intl 1,440 1,334 7.9% 1.8% 6.1%
WW 3,477 3,122 11.4% 8.8% 2.6%
CONCERTA
US 576 547 5.3% 5.3% -
Intl 163 125 30.5% 22.4% 8.1%
WW 739 672 10.0% 8.5% 1.5%
DURAGESIC
US 319 369 -13.8% -13.8% -
Intl 581 633 -8.2% -13.2% 5.0%
WW 900 1,002 -10.2% -13.4% 3.2%
EPREX/PROCRIT
US 1,359 1,573 -13.6% -13.6% -
Intl 898 819 9.6% 2.2% 7.4%
WW 2,257 2,392 -5.6% -8.1% 2.5%
Hormonal Contraceptives
US 516 597 -13.7% -13.7% -
Intl 194 175 11.3% 5.0% 6.3%
WW 710 772 -8.0% -9.4% 1.4%
LEVAQUIN
US 1,153 1,063 8.5% 8.5% -
Intl 44 29 52.3% 51.2% 1.1%
WW 1,197 1,092 9.6% 9.6% 0.0%
REMICADE
US 1,873 1,763 6.3% 6.3% -
Intl 546 470 16.1% 16.1% 0.0%
WW 2,419 2,233 8.3% 8.3% 0.0%
TOPAMAX
US 1,471 1,200 22.5% 22.5% -
Intl 330 298 10.9% 4.0% 6.9%
WW 1,801 1,498 20.2% 18.8% 1.4%
(1) Operational growth excludes the effect of currency
(2) Select areas (unaudited)
(3) Includes Risperdal, Risperdal Consta & Invega
REPORTED SALES vs. PRIOR PERIOD
$MM
CURRENT QUARTER
% Change
3Q 2007 3Q 2006 Reported Operational(1) Currency
MEDICAL DEVICES AND DIAGNOSTICS (2)
Cordis
US 373 502 -25.6% -25.6% -
Intl 404 481 -16.3% -20.7% 4.4%
WW 777 983 -21.0% -23.1% 2.1%
DePuy
US 636 605 5.2% 5.2% -
Intl 450 366 22.9% 14.6% 8.3%
WW 1,086 971 11.9% 8.8% 3.1%
Ethicon
US 349 326 7.2% 7.2% -
Intl 528 470 12.1% 4.7% 7.4%
WW 877 796 10.1% 5.7% 4.4%
Ethicon Endo-Surgery
US 440 416 5.8% 5.8% -
Intl 482 409 17.7% 10.9% 6.8%
WW 922 825 11.7% 8.3% 3.4%
LifeScan
US 321 278 15.3% 15.3% -
Intl 264 227 16.8% 9.0% 7.8%
WW 585 505 16.0% 12.5% 3.5%
Ortho-Clinical Diagnostics
US 219 184 18.7% 18.7% -
Intl 185 176 5.4% -0.2% 5.6%
WW 404 360 12.2% 9.5% 2.7%
Total Vision Care
US 214 185 15.1% 15.1% -
Intl 363 308 18.5% 15.7% 2.8%
WW 577 493 17.2% 15.5% 1.7%
YEAR TO DATE
% Change
3Q 2007 3Q 2006 Reported Operational(1) Currency
MEDICAL DEVICES AND DIAGNOSTICS (2)
Cordis
US 1,194 1,569 -23.9% -23.9% -
Intl 1,363 1,557 -12.5% -15.8% 3.3%
WW 2,557 3,126 -18.2% -19.9% 1.7%
DePuy
US 1,977 1,892 4.5% 4.5% -
Intl 1,401 1,153 21.5% 13.9% 7.6%
WW 3,378 3,045 10.9% 8.0% 2.9%
Ethicon
US 1,043 943 10.6% 10.6% -
Intl 1,605 1,443 11.2% 4.8% 6.4%
WW 2,648 2,386 11.0% 7.1% 3.9%
Ethicon Endo-Surgery
US 1,311 1,212 8.2% 8.2% -
Intl 1,459 1,264 15.4% 9.4% 6.0%
WW 2,770 2,476 11.9% 8.9% 3.0%
LifeScan
US 923 857 7.7% 7.7% -
Intl 807 675 19.6% 12.5% 7.1%
WW 1,730 1,532 13.0% 9.9% 3.1%
Ortho-Clinical Diagnostics
US 653 568 14.9% 14.9% -
Intl 550 530 3.7% -1.2% 4.9%
WW 1,203 1,098 9.5% 7.2% 2.3%
Total Vision Care
US 622 541 15.0% 15.0% -
Intl 1,021 867 17.8% 16.1% 1.7%
WW 1,643 1,408 16.7% 15.7% 1.0%
(1) Operational growth excludes the effect of currency
(2) Select areas (unaudited)
REPORTED SALES vs. PRIOR PERIOD
$MM
CURRENT QUARTER
% Change
3Q 2007 3Q 2006 Reported Operational(1) Currency
CONSUMER SEGMENT (2) (3)
Beauty Care
US 311 265 17.2% 17.2% -
Intl 426 370 15.1% 7.9% 7.2%
WW 737 635 16.0% 11.8% 4.2%
Baby & Kids Care
US 113 102 10.3% 10.3% -
Intl 398 349 14.2% 6.4% 7.8%
WW 511 451 13.3% 7.3% 6.0%
Oral Care (4)
US 211 NA - - -
Intl 185 NA - - -
WW 396 NA - - -
OTC/Nutritionals
US 653 481 36.0% 36.0% -
Intl 611 218 179.9% 172.5% 7.4%
WW 1,264 699 80.9% 78.6% 2.3%
Women's Health
US 149 151 -1.4% -1.4% -
Intl 312 281 11.2% 3.0% 8.2%
WW 461 432 6.8% 1.5% 5.3%
YEAR TO DATE
% Change
3Q 2007 3Q 2006 Reported Operational(1) Currency
Operational (1) Currency
CONSUMER SEGMENT (2) (3)
Beauty Care
US 1,006 863 16.5% 16.5% -
Intl 1,252 1,085 15.4% 9.0% 6.4%
WW 2,258 1,948 15.9% 12.3% 3.6%
Baby & Kids Care
US 328 302 8.5% 8.5% -
Intl 1,117 977 14.4% 8.0% 6.4%
WW 1,445 1,279 13.0% 8.1% 4.9%
Oral Care (4)
US 600 NA - - -
Intl 509 NA - - -
WW 1,109 NA - - -
OTC/Nutritionals
US 1,892 1,340 41.3% 41.3% -
Intl 1,835 645 184.4% 177.7% 6.7%
WW 3,727 1,985 87.8% 85.6% 2.2%
Women's Health
US 475 448 6.1% 6.1% -
Intl 870 798 9.0% 2.2% 6.8%
WW 1,345 1,246 8.0% 3.7% 4.3%
(1) Operational growth excludes the effect of currency
(2) Select areas (unaudited)
(3) 2007 Includes sales from acquisition of PCH
(4) Oral Care not disclosed in 2006
SOURCE Johnson & Johnson
http://www.jnj.com
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