The common stock of healthcare and medical device giant Johnson & Johnson (JNJ) soared to recent highs following the company's announcement of first quarter results that beat analysts' estimates.
The company's robust performance was driven by new and existing drug sales. JNJ reported that, before currency adjustments, its worldwide pharmaceuticals were up 12.2 percent for the quarter.
Standout performers on the pharma side included Stelara, for plaque psoriasis and psoriatic arthritis, up 32% year-over-year to $456 million and Zytiga, for metastatic castration-resistant prostate cancer, sales of which were up 49% to $512 million. Remicade sales were up slightly to $1.6 billion for the quarter.
Reduced production and administration expenses were also credited with improving the bottom line.
Refresh your medical device industry knowledge at MD&M East, June 9–12, 2014 in New York City.
Consumer products experienced declines in revenue and medical device revenue was flat, the company reported in its press release covering the quarter.
JNJ said its Worldwide Medical Devices and Diagnostics division sales of $7.1 billion were flat compared to the prior year. Although the company experienced an operational increase of 1.8%, this was offset by a negative currency impact of 1.8%. Domestic sales decreased 1.6%. International sales increased 1.3%, which reflected an operational increase of 4.6% and a negative currency impact of 3.3%.
Primary contributors to operational growth were sales of products in the Orthopaedics business; the Specialty Surgery business; and Biosense Webster's electrophysiology products in the Cardiovascular Care business.
Earnings per share came in at $1.54, easily outpacing the Zacks Consensus Estimate of $1.48 and the year-ago earnings of $1.44. Revenues rose 3.5% to $18.12 billion, trumping the Zacks Consensus Estimate of $17.99 billion, said Sweta Killa, writing for Zacks.com.
According to Killa, JNJ is trading at its highest level in more than 34 years. The stock has gained 21% over the past one-year period, he said.
Putting the icing on the cake, JNJ also raised its full-year earnings outlook in expectation of strong continued performance.
Looking forward, FDA has recently approved the company's Thermocool Smarttouch Catheter for treatment of patients suffering from drug-resistant paroxysmal atrial fibrillation. Also during the just-ended quarter, JNJ accepted a binding offer from The Carlyle Group to acquire the Ortho-Clinical Diagnostics business for approximately $4.0 billion. The transaction is expected to close toward the middle of the year, upon satisfaction of customary closing conditions.
