J&J's strong foreign sales offset drops in U.S. pharma, consumer health

If Johnson & Johnson ($JNJ) had to rely on its U.S. sales for growth, its third-quarter report would be a big disappointment. The company's domestic business saw sales drop 3.7%, due to declines across the board in prescription drugs, consumer products and medical devices. Earnings fell, too, partly because of the U.S. weakness.

The good news is that earnings of $1.24 per share, excluding special items, beat analyst projections of $1.21. And international sales showed some major oomph, growing at a real rate of about 8%, or 16.4% including currency effects. Total revenues came in at $16 billion, an increase of 6.8%.

The pharma division saw an even greater lift from international sales: Real growth of 18.5% (27.5% with currency gains) versus a domestic drop of 6.1%. Overall, the division grew 9%, with strong showings from its HIV drug Prezista (37% growth), blood cancer drug Velcade (20% growth) and arthritis remedy Remicade (up 15%). Those gains were partly offset by a 91% drop in sales of the former blockbuster antibiotic Levaquin.

In a way it's a harbinger of things to come. Like its Big Pharma rivals, J&J is looking to emerging markets to help goose sales, now that growth in established markets has slowed almost to a halt.

Consumer health is still struggling to regain its feet. In the consumer division, OTC drug sales fell by 24%, thanks to ongoing recalls and manufacturing problems. During the earnings call, executives said J&J products lost "significant" market share to private-label brands while its quality problems kept branded products off store shelves, Bloomberg reports.

- read the J&J release
- see the Bloomberg article
- see the Reuters story