Johnson & Johnson ($JNJ) delivered a double whammy with its latest financial announcement: Fourth-quarter earnings dropped by 89%, thanks to litigation and a product recall, and profit forecasts for 2012 fell short of analyst estimates.
The news isn't terrible; after all, profits are still expected to come in at $5.05 to $5.15 per share, and without the one-time charges, Q4 earnings beat expectations. But it's another blah development after two years of repeated operational stumbles, and the unexciting forecast threatens to overshadow the company's real accomplishments, including several newly approved drugs and a 6.7% increase in pharma revenues.
Morningstar's Damien Conover called the 2012 forecast "a little weak," with the rest of the results "pretty much in line," Reuters reports. And here's how Miller Tabak analyst Les Funtleyder summed it up for Bloomberg: "There's nothing here that's frightening, though we'd love to see a little bit more oomph in the revenue line."
CEO William Weldon (photo) tried to supply that oomph, casting the latest numbers as evidence that the company has "turned the corner," putting the rocky road of recalls and quality problems behind it. But as The Wall Street Journal points out, J&J is continuing to struggle with manufacturing issues, such as ongoing supply problems with its Doxil cancer drug, which has run short for months now. And then there are the ongoing legal problems, including lawsuits over its antipsychotic drug Risperdal and an impending settlement with the U.S. Justice Department.