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Johnson & Johnson Reports 2012 First-Quarter Results: 86.5 KB

Johnson & Johnson Reports 2012 First-Quarter Results:

Apr 17, 2012

NEW BRUNSWICK, N.J., April 17, 2012 /PRNewswire-FirstCall/ -- Johnson & Johnson (NYSE: JNJ) today announced sales of $16.1 billion for the first quarter of 2012, a decrease of 0.2% as compared to the first quarter of 2011. Operational results increased 1.0% and the negative impact of currency was 1.2%. Domestic sales declined 5.1%. International sales increased 4.1%, reflecting operational growth of 6.4% and a negative currency impact of 2.3%.

Net earnings and diluted earnings per share for the first quarter of 2012 were $3.9 billion and $1.41, respectively. First quarter 2012 net earnings included an after-tax gain of $106 million primarily related to the currency adjustment associated with the planned acquisition of Synthes, Inc. First quarter 2011 net earnings included after-tax charges of $271 million representing expenses due to litigation and DePuyASR™ Hip recall costs. Excluding these special items, net earnings for the current quarter were $3.8 billion and diluted earnings per share were $1.37, representing increases of 1.5% and 1.5%, respectively, as compared to the same period in 2011.*

The Company updated its earnings guidance for full-year 2012 to $5.07 - $5.17 per share to reflect the positive impact of current exchange rates. The Company's guidance excludes the impact of special items.

"We continue to bring meaningful innovations to our patients and customers through the strong performance of our recently launched products," said William C. Weldon, Chairman and Chief Executive Officer. "The dedication of the people of Johnson & Johnson gives me great confidence in the prospects of our business to deliver sustainable growth, well into the future."

Worldwide Consumer sales of $3.6 billion for the first quarter represented a decrease of 2.4% versus the prior year consisting of an operational decline of 0.6% and a negative impact from currency of 1.8%. Domestic sales decreased 2.2%. International sales decreased 2.5%, which reflected an operational increase of 0.4% and a negative currency impact of 2.9%.

Sales of the U.S. over-the-counter medicines were significantly impacted by the suspension of manufacturing at the McNeil Consumer Healthcare facility in Fort Washington, Pa., and the impact on production volumes related to ongoing efforts to enhance quality and manufacturing systems. Positive contributors to operational results were NEUTROGENA® skin care products and international sales of oral care products.

Worldwide Pharmaceutical sales of $6.1 billion for the first quarter represented an increase of 1.2% versus the prior year with operational growth of 2.6% and a negative impact from currency of 1.4%. Domestic sales decreased 10.8%. International sales increased 16.5% which reflected an operational increase of 19.6% and a negative currency impact of 3.1%.

Positive contributors to international sales were strong results for REMICADE® (infliximab), a biologic approved for the treatment of a number of immune-mediated, inflammatory diseases, representing incremental sales from international territories included in the amended distribution agreement with Merck; VELCADE® (bortezomib), a treatment for multiple myeloma; and sales of recently launched products.

The strong sales results of recently launched products, include ZYTIGA® (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone or prednisolone, for the treatment of men with metastatic, castration-resistant prostate cancer; STELARA® (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis; and international sales of INCIVO® (telaprevir), a direct acting antiviral protease inhibitor, for the treatment of genotype-1 chronic hepatitis C virus, in combination with peginterferon alfa and ribavirin, in adults.

Sales results in the U.S. were negatively impacted by generic competition for LEVAQUIN® (levofloxacin), a treatment for bacterial infections, and the manufacturing suspension at a third party supplier for DOXIL® (doxorubicin HCl liposome injection)/CAELYX® (pegylated liposomal doxorubicin hydrochloride), a medication to treat ovarian and other cancers.

During the quarter, Janssen Pharmaceutica NV completed the divestiture of its U.S. patents and other U.S. and Canadian intellectual property for Bystolic® (nebivolol), which is currently approved in the U.S. for the treatment of hypertension, to Forest Laboratories Holdings Limited.

Worldwide Medical Devices and Diagnostics sales of $6.4 billion for the first quarter represented a decrease of 0.3% versus the prior year consisting of an operational increase of 0.5% and a negative currency impact of 0.8%. Domestic sales increased 0.2%. International sales decreased 0.7%, which reflected an operational increase of 0.7% and a negative currency impact of 1.4%.

Primary contributors to operational growth included LifeScan's blood glucose monitoring products; Vistakon's disposable contact lenses; Biosense Webster's electrophysiology business; and Advanced Sterilization Products' infection prevention technologies. The growth was impacted by lower sales in the Cardiovascular Care business, reflecting the decision made to exit the drug eluting stent market in the 2^nd Quarter of 2011.

During the quarter, Ethicon Endo-Surgery Inc. received an approvable letter for the SEDASYS® System, a computer assisted personalized sedation system, from the FDA's Center for Devices and Radiological Health.

In connection with the pending purchase of Synthes, Inc., DePuy Orthopaedics, Inc. received a binding offer from Biomet, Inc. to acquire the DePuy Orthopaedics Trauma business. The offer includes the purchase of DePuy's internal and external fixation products used in the treatment of bone fractures as well as the organization supporting this business. The divestiture is subject to receipt of regulatory approvals and other customary closing conditions.

About Johnson & Johnson
Caring for the world, one person at a time, inspires and unites the people of Johnson & Johnson. We embrace research and science - bringing innovative ideas, products and services to advance the health and well-being of people. Our approximately 117,000 employees at more than 250 Johnson & Johnson operating companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.

* Net earnings and diluted earnings per share excluding special items are non-GAAP financial measures and should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the financial schedules accompanying this press release and can be found in the Investor Relations section of the Company's website at www.investor.jnj.com.

Johnson & Johnson will conduct a conference call with financial analysts to discuss this news release today at 8:30 a.m., Eastern Time. A simultaneous webcast of the meeting for investors and other interested parties 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 www.investor.jnj.com/historical-sales.cfm. These schedules include supplementary sales data, a condensed consolidated statement of earnings, and sales of key products/franchises. Additional information on Johnson & Johnson, including a pharmaceutical pipeline of selected compounds in late stage development and medical devices and diagnostics pipeline of selected products, can be found on the Company's website at www.jnj.com

NOTE TO INVESTORS

(This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned not to rely on these forward-looking statements. 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 the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to, general industry conditions and competition; economic factors, such as interest rate and currency exchange rate fluctuations; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; challenges to patents; significant adverse litigation; impact of business combinations; financial distress and bankruptcies experienced by significant customers and suppliers; changes to governmental laws and regulations and domestic and foreign health care reforms; trends toward health care cost containment; increased scrutiny of the health care industry by government agencies; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and sovereign risk; disruptions due to natural disasters; manufacturing difficulties or delays; and product efficacy or safety concerns resulting in product recalls or regulatory action. A further list and description of these risks, uncertainties and other factors can be found in Exhibit 99 of Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended January 1, 2012. 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)	FIRST QUARTER
					Percent Change
	2012	2011	Total		Operations	Currency
Sales to customers by
segment of business

Consumer
U.S.	$ 1,316	1,345	(2.2)	%	(2.2)	-
International	2,279	2,337	(2.5)		0.4	(2.9)
	3,595	3,682	(2.4)		(0.6)	(1.8)

Pharmaceutical
U.S.	3,026	3,391	(10.8)		(10.8)	-
International	3,107	2,668	16.5		19.6	(3.1)
	6,133	6,059	1.2		2.6	(1.4)

Med Devices & Diagnostics
U.S.	2,877	2,872	0.2		0.2	-
International	3,534	3,560	(0.7)		0.7	(1.4)
	6,411	6,432	(0.3)		0.5	(0.8)

U.S.	7,219	7,608	(5.1)		(5.1)	-
International	8,920	8,565	4.1		6.4	(2.3)
Worldwide	$ 16,139	16,173	(0.2)	%	1.0	(1.2)

Johnson & Johnson and Subsidiaries
Supplementary Sales Data

(Unaudited; Dollars in Millions)	FIRST QUARTER
					Percent Change
	2012	2011	Total		Operations	Currency
Sales to customers by
geographic area

U.S.	$ 7,219	7,608	(5.1)	%	(5.1)	-

Europe	4,194	4,183	0.3		4.5	(4.2)
Western Hemisphere excluding U.S.	1,714	1,436	19.4		23.3	(3.9)
Asia-Pacific, Africa	3,012	2,946	2.2		1.2	1.0
International	8,920	8,565	4.1		6.4	(2.3)

Worldwide	$ 16,139	16,173	(0.2)	%	1.0	(1.2)

Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings


(Unaudited; in Millions Except Per Share Figures)	FIRST QUARTER

	2012			2011			Percent
			Percent			Percent	Increase
	Amount		to Sales	Amount		to Sales	(Decrease)
Sales to customers	$ 16,139		100.0	$ 16,173		100.0	(0.2)
Cost of products sold	4,915		30.4	4,778		29.5	2.9
Selling, marketing and administrative expenses	5,015		31.1	5,056		31.3	(0.8)
Research and development expense	1,645		10.2	1,738		10.8	(5.4)
Interest (income)expense, net	130		0.8	104		0.6	25.0
Other (income)expense, net	(611)		(3.8)	(13)		(0.1)
Earnings before provision for taxes on income	5,045		31.3	4,510		27.9	11.9
Provision for taxes on income	1,135		7.1	1,034		6.4	9.8
Net earnings	$ 3,910		24.2	$ 3,476		21.5	12.5


Net earnings per share (Diluted)	$ 1.41			$ 1.25			12.8

Average shares outstanding (Diluted)	2,774.9			2,772.7

Effective tax rate	22.5	%		22.9	%

Adjusted earnings before provision for taxes and net earnings (1) (A)
Earnings before provision for taxes on income	$ 4,928		30.5	$ 4,856		30.0	1.5
Net earnings	$ 3,804		23.6	$ 3,747		23.2	1.5
Net earnings per share (Diluted)	$ 1.37			$ 1.35			1.5
Effective tax rate	22.8	%		22.8	%

(1) See Reconciliation of Non-GAAP Financial Measures.

(A) NON-GAAP FINANCIAL MEASURES "Adjusted earnings before provision for taxes on income," "adjusted net earnings," "adjusted net earnings per share (diluted)," and "adjusted effective tax rate" are non-GAAP financial measures and should not be considered replacements for GAAP results. The Company provides earnings before provision for taxes on income, net earnings, net earnings per share (diluted), and effective tax rate on an adjusted basis because management believes that these measures provide useful information to investors. Among other things, these measures may assist investors in evaluating the Company's results of operations period over period. In various periods, these measures may exclude such items as significant costs associated with acquisitions, restructuring, litigation, and changes in applicable laws and regulations (including significant accounting or tax matters). Special items may be highly variable, difficult to predict, and of a size that sometimes has substantial impact on the Company's reported results of operations for a period. Management uses these measures internally for planning, forecasting and evaluating the performances of the Company's businesses, including allocating resources and evaluating results relative to employee performance compensation targets. Unlike earnings before provision for taxes on income, net earnings, net earnings per share (diluted), and effective tax rate prepared in accordance with GAAP, adjusted earnings before provision for taxes on income, adjusted net earnings, adjusted net earnings per share (diluted), and adjusted effective tax rate may not be comparable with the calculation of similar measures for other companies. These non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses the performance of the Company. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of the Company's results of operations without including all events during a period, such as the effects of an acquisition, restructuring, litigation, and changes in applicable laws and regulations (including significant accounting or tax matters) and do not provide a comparable view of the Company's performance to other companies in the health care industry. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.

Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures

	First Quarter		% Incr. /
(Dollars in Millions Except Per Share Data)	2012	2011	(Decr.)

Earnings before provision for taxes on income - as reported	$ 5,045	4,510	11.9	%

Litigation/DePuy ASR™ Hip related costs	-	346

Currency related and costs associated with planned acquisition of Synthes, Inc.	(117)	-

Earnings before provision for taxes on income - as adjusted	$ 4,928	4,856	1.5	%

Net Earnings - as reported	$ 3,910	3,476	12.5	%

Litigation/DePuy ASR™ Hip related costs	-	271

Currency related and costs associated with planned acquisition of Synthes, Inc.	(106)	-

Net Earnings - as adjusted	$ 3,804	3,747	1.5	%

Diluted Net Earnings per share - as reported	$ 1.41	1.25	12.8	%

Litigation/DePuy ASR™ Hip related costs	-	0.10

Currency related and costs associated with planned acquisition of Synthes, Inc.	(0.04)	-

Diluted Net Earnings per share - as adjusted	$ 1.37	1.35	1.5	%


The Company believes investors gain additional perspective of underlying business trends and results by providing a measure of earnings before provision for
taxes on income, net earnings and diluted net earnings per share that excludes special items in order to evaluate ongoing business operations.

	REPORTED SALES vs. PRIOR PERIOD ($MM)
	FIRST QUARTER
				% Change
		2012	2011	Reported	Operational ⁽¹⁾	Currency
CONSUMER SEGMENT ⁽²⁾
BABY CARE
US		$ 99	105	-5.7%	-5.7%	-
Intl		441	456	-3.3%	-0.4%	-2.9%
WW		540	561	-3.7%	-1.4%	-2.3%
ORAL CARE
US		155	163	-4.9%	-4.9%	-
Intl		232	228	1.8%	4.7%	-2.9%
WW		387	391	-1.0%	0.7%	-1.7%
OTC/NUTRITIONALS
US		381	397	-4.0%	-4.0%	-
Intl		723	732	-1.2%	1.7%	-2.9%
WW		1,104	1,129	-2.2%	-0.3%	-1.9%
SKIN CARE
US		453	426	6.3%	6.3%	-
Intl		454	473	-4.0%	-1.7%	-2.3%
WW		907	899	0.9%	2.1%	-1.2%
WOMEN'S HEALTH
US		93	125	-25.6%	-25.6%	-
Intl		316	334	-5.4%	-1.7%	-3.7%
WW		409	459	-10.9%	-8.2%	-2.7%
WOUND CARE/OTHER
US		135	129	4.7%	4.7%	-
Intl		113	114	-0.9%	1.7%	-2.6%
WW		248	243	2.1%	3.3%	-1.2%

TOTAL CONSUMER
US		1,316	1,345	-2.2%	-2.2%	-
Intl		2,279	2,337	-2.5%	0.4%	-2.9%
WW		$ 3,595	3,682	-2.4%	-0.6%	-1.8%


See footnotes at end of schedule







	REPORTED SALES vs. PRIOR PERIOD ($MM)
	FIRST QUARTER
				% Change
		2012	2011	Reported	Operational ⁽¹⁾	Currency
PHARMACEUTICAL SEGMENT ^{(2) (4)}
IMMUNOLOGY
US		$ 1,453	1,436	1.2%	1.2%	-
Intl		442	144	*	*	-2.2%
WW		1,895	1,580	19.9%	20.5%	-0.6%
REMICADE
US		882	788	11.9%	11.9%	-
US Exports ⁽³⁾		378	490	-22.9%	-22.9%	-
Intl		261	7	*	*	-2.2%
WW		1,521	1,285	18.4%	18.4%	0.0%
SIMPONI
US		64	53	20.8%	20.8%	-
Intl		52	42	23.8%	25.0%	-1.2%
WW		116	95	22.1%	22.6%	-0.5%
STELARA
US		129	105	22.9%	22.9%	-
Intl		92	61	50.8%	53.9%	-3.1%
WW		221	166	33.1%	34.8%	-1.7%
OTHER IMMUNOLOGY
US		-	-	-	-	-
Intl		37	34	8.8%	10.7%	-1.9%
WW		37	34	8.8%	10.7%	-1.9%
INFECTIOUS DISEASES
US		242	624	-61.2%	-61.2%	-
Intl		513	307	67.1%	70.5%	-3.4%
WW		755	931	-18.9%	-17.0%	-1.9%
INTELENCE
US		43	38	13.2%	13.2%	-
Intl		37	31	19.4%	23.0%	-3.6%
WW		80	69	15.9%	17.8%	-1.9%
LEVAQUIN/FLOXIN
US		18	422	-95.7%	-95.7%	-
Intl		11	12	-8.3%	-4.8%	-3.5%
WW		29	434	-93.3%	-93.2%	-0.1%
PREZISTA
US		160	126	27.0%	27.0%	-
Intl		164	140	17.1%	20.9%	-3.8%
WW		324	266	21.8%	24.1%	-2.3%
OTHER INFECTIOUS DISEASES
US		21	38	-44.7%	-44.7%	-
Intl		301	124	*	*	-3.2%
WW		322	162	98.8%	*	-3.0%



	REPORTED SALES vs. PRIOR PERIOD ($MM)
	FIRST QUARTER
				% Change
		2012	2011	Reported	Operational ⁽¹⁾	Currency

NEUROSCIENCE
US		$ 674	688	-2.0%	-2.0%	-
Intl		973	1,057	-7.9%	-5.8%	-2.1%
WW		1,647	1,745	-5.6%	-4.3%	-1.3%
CONCERTA/METHYLPHENIDATE
US		197	254	-22.4%	-22.4%	-
Intl		111	108	2.8%	5.8%	-3.0%
WW		308	362	-14.9%	-14.0%	-0.9%
INVEGA
US		69	69	0.0%	0.0%	-
Intl		52	51	2.0%	3.7%	-1.7%
WW		121	120	0.8%	1.5%	-0.7%
INVEGA SUSTENNA
US		100	65	53.8%	53.8%	-
Intl		61	-	100.0%	100.0%	-
WW		161	65	*	*	-
RISPERDAL CONSTA
US		113	114	-0.9%	-0.9%	-
Intl		248	290	-14.5%	-11.8%	-2.7%
WW		361	404	-10.6%	-8.7%	-1.9%
OTHER NEUROSCIENCE
US		195	186	4.8%	4.8%	-
Intl		501	608	-17.6%	-16.2%	-1.4%
WW		696	794	-12.3%	-11.2%	-1.1%
ONCOLOGY
US		107	64	67.2%	67.2%	-
Intl		489	375	30.4%	33.7%	-3.3%
WW		596	439	35.8%	38.5%	-2.7%
DOXIL/CAELYX
US		7	64	-89.1%	-89.1%	-
Intl		17	75	-77.3%	-76.2%	-1.1%
WW		24	139	-82.7%	-82.1%	-0.6%
VELCADE
US		-	-	-	-	-
Intl		353	280	26.1%	29.3%	-3.2%
WW		353	280	26.1%	29.3%	-3.2%
ZYTIGA
US		100	-	100.0	100.0	-
Intl		100	5	*	*	-1.9%
WW		200	5	*	*	-1.9%
OTHER ONCOLOGY
US		-	-	-	-	-
Intl		19	15	26.7%	29.7%	-3.0%
WW		19	15	26.7%	29.7%	-3.0%


	REPORTED SALES vs. PRIOR PERIOD ($MM)
	FIRST QUARTER
				% Change
		2012	2011	Reported	Operational ⁽¹⁾	Currency
TOTAL OTHER
US		$ 550	579	-5.0%	-5.0%	-
Intl		690	785	-12.1%	-10.0%	-2.1%
WW		1,240	1,364	-9.1%	-7.9%	-1.2%
ACIPHEX/PARIET
US		96	109	-11.9%	-11.9%	-
Intl		126	130	-3.1%	-	-3.1%
WW		222	239	-7.1%	-5.4%	-1.7%
PROCRIT/EPREX
US		204	190	7.4%	7.4%	-
Intl		172	207	-16.9%	-14.0%	-2.9%
WW		376	397	-5.3%	-3.8%	-1.5%
OTHER
US		250	280	-10.7%	-10.7%	-
Intl		392	448	-12.5%	-11.1%	-1.4%
WW		642	728	-11.8%	-11.0%	-0.8%

TOTAL PHARMACEUTICAL
US		3,026	3,391	-10.8%	-10.8%	-
Intl		3,107	2,668	16.5%	19.6%	-3.1%
WW		$ 6,133	6,059	1.2%	2.6%	-1.4%


See footnotes at end of schedule



	REPORTED SALES vs. PRIOR PERIOD ($MM)
	FIRST QUARTER
				% Change
		2012	2011	Reported	Operational ⁽¹⁾	Currency
MEDICAL DEVICES AND DIAGNOSTICS ⁽²⁾⁽⁴⁾
CARDIOVASCULAR CARE
US		$ 176	242	-27.3%	-27.3%	-
Intl		306	393	-22.1%	-21.2%	-0.9%
WW		482	635	-24.1%	-23.5%	-0.6%
DIABETES CARE
US		352	311	13.2%	13.2%	-
Intl		318	326	-2.5%	0.2%	-2.7%
WW		670	637	5.2%	6.6%	-1.4%
DIAGNOSTICS
US		253	265	-4.5%	-4.5%	-
Intl		259	256	1.2%	2.5%	-1.3%
WW		512	521	-1.7%	-1.1%	-0.6%
GENERAL SURGERY
US		593	596	-0.5%	-0.5%	-
Intl		1,032	1,025	0.7%	2.6%	-1.9%
WW		1,625	1,621	0.2%	1.4%	-1.2%
INFECTION PREVENTION/OTHER
US		116	95	22.1%	22.1%	-
Intl		128	121	5.8%	6.5%	-0.7%
WW		244	216	13.0%	13.4%	-0.4%
ORTHOPAEDICS
US		783	811	-3.5%	-3.5%	-
Intl		710	692	2.6%	4.1%	-1.5%
WW		1,493	1,503	-0.7%	0.0%	-0.7%
SPECIALTY SURGERY
US		327	296	10.5%	10.5%	-
Intl		301	281	7.1%	9.3%	-2.2%
WW		628	577	8.8%	9.9%	-1.1%
VISION CARE
US		277	256	8.2%	8.2%	-
Intl		480	466	3.0%	2.6%	0.4%
WW		757	722	4.8%	4.5%	0.3%

TOTAL MEDICAL DEVICES AND DIAGNOSTICS
US		2,877	2,872	0.2%	0.2%	-
Intl		3,534	3,560	-0.7%	0.7%	-1.4%
WW		$ 6,411	6,432	-0.3%	0.5%	-0.8%

* Percentage greater than 100%
(1) Operational growth excludes the effect of currency
(2) Select areas (unaudited)
(3) Reported as U.S. sales
(4) Prior year amounts have been reclassified to conform to current year product disclosure

SOURCE Johnson & Johnson

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