TRENTON, N.J. (AP) - Health products maker Johnson & Johnson reported a 40 percent jump Tuesday in its first-quarter profit, due to higher sales of consumer products, favorable exchange rates and a research charge a year ago.
The New Brunswick, N.J.-based maker of contraceptives, medical devices, baby care items and prescription drugs reported net income of $3.6 billion, or $1.26 per share, for the first three months of the year, up from $2.57 billion, or 88 cents a share, a year ago. The year-ago quarter included a charge of $807 million related to the acquisition of Conor Medsystems Inc., a developer of stents.
Revenues rose 7.7 percent to $16.19 billion from $15.04 billion a year earlier.
Analysts surveyed by Thomson Financial were expecting lower earnings of $1.20 a share on revenue of $15.83 billion.
Despite beating Wall Street estimates, J&J shares were down 21 cents at $65.53 in morning trading.
Sales in the consumer product business, driven partly by the recent launch of nonprescription Zyrtec for allergies, jumped 16 percent to $4.06 billion. Sales of prescription drugs increased only 3.3 percent, to $6.43 billion, and revenues from medical devices and diagnostics rose 7.2 percent to $5.7 billion, with nearly all of those increase coming from sales overseas. Overall, favorable foreign-currency exchange rates boosted J&J's total revenues by 5.1 percent.
J&J's chief financial officer, Dominic Caruso, told analysts during a conference call that the company now expects earnings per share for 2008 to total $4.40 to $4.45, excluding one-time items, up a penny from the $4.39 to $4.44 forecast it gave in January.
He noted that the cost-savings program begun last July has already begun to affect operating costs, partly offsetting the continued impact of generic competition and the weakening market for its key anemia drug Procrit.
"We continue to invest in growth opportunities that are critical to our future and are continuing to manage our costs," he said.
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