Johnson & Johnson sales down, but profits up
The company boosted its outlook for the year, encouraging investors despite sales drops in all three of its major segments.
Pharmaceutical and health care products firm Johnson & Johnson (JNJ) reported a 4% increase in its profits for the second quarter and boosted its outlook for the rest of the year despite declining sales.
The New Jersey-based company's net earnings rose to $4.5 billion for the second quarter. The maker of Tylenol, Zyrtec and Listerine said its global sales fell 9% to $17.8 billion.
When factoring out the impact of mergers and divestitures, Johnson & Johnson's operational sales rose 1.7% for the period.
J&J shares ended down 0.5% to $99.78 for the day.
"Our solid sales and earnings results in the quarter reflect the strong underlying growth we're seeing across the enterprise," J&J CEO Alex Gorsky said in a statement. "Our diverse portfolio and scale are enabling this performance, and we've continued to invest in building a robust enterprise pipeline that will drive our growth over the long term."
Each of the company's three largest segments reported sales declines. The consumer business dropped 7%, the pharmaceutical segment slipped 7% and the medical devices category fell 12%.
But investors were encouraged by the company's decision to raise its outlook for adjusted after-tax earnings per share from $6.10 to $6.20.
J&J's sprawling footprint includes more than 265 companies and 127,300 employees.
The company's diversity and consistent growth rates represent the underpinnings J&J's continued Aaa credit rating, said Michael Levesque, Moody's senior vice president.
"After adjusting for currency movements, J&J's low-single digit organic growth of 1.7% in the wake of competitive factors and pricing pressure is impressive and speaks to the diversity of its business," said Levesque.
Contributing: Kevin McCoy
Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.