Johnson & Johnson Reports 2012 First-Quarter Results:

Sales of $16.1 Billion Decreased 0.2% Versus 2011 First-Quarter; First Quarter EPS was $1.41 Excluding Special Items, 2012 First-Quarter EPS of $1.37 Increased 1.5%*

News provided by

Johnson & Johnson

Apr 17, 2012, 07:45 ET

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 DePuy ASR™  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)/CAEYLX® (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 2nd 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