Johnson & Johnson Reports 2010 Third-Quarter Results:

Oct 19, 2010 8:29am

Sales of $15.0 Billion Decreased 0.7% Versus 2009 Third-Quarter; EPS of $1.23 increased 2.5% Versus 2009 Third-Quarter

NEW BRUNSWICK, N.J., Oct. 19 /PRNewswire-FirstCall/ -- Johnson & Johnson (NYSE: JNJ) today announced sales of $15.0 billion for the third quarter of 2010, a decrease of 0.7% as compared to the third quarter of 2009. Operational results increased 0.1% and the negative impact of currency was 0.8%. Domestic sales declined 2.5%, while international sales increased 1.1%, reflecting operational growth of 2.6% and a negative currency impact of 1.5%.

Net earnings and diluted earnings per share for the third quarter of 2010 were $3.4 billion and $1.23, respectively, representing increases of 2.2% and 2.5%, as compared to the same period in 2009.

The Company raised its earnings guidance for full-year 2010 to $4.70 - $4.80 per share, reflecting recent currency exchange rates. The Company's guidance excludes the impact of special items.

"We continue to deliver solid earnings while investing in our future through complementary strategic partnerships and acquisitions," said William C. Weldon, Chairman and Chief Executive Officer. "Our pharmaceutical business has returned to growth this year and we continue to advance our pipeline with promising clinical data in key therapeutic areas. We are pleased with the strong performance of newly launched products in both our pharmaceutical and medical device and diagnostics businesses."

Worldwide Consumer sales of $3.6 billion for the third quarter represented a decrease of 10.6% versus the prior year consisting of an operational decline of 10.2% and a negative impact from currency of 0.4%. Domestic sales decreased 24.5%; international sales decreased 0.3%, which reflected an operational increase of 0.4% and a negative currency impact of 0.7%.

Positive contributors to operational results were Dabao skin care products, baby care products, and international sales of anti-smoking aids. Sales were significantly impacted by the previously announced recalls of certain over-the-counter medicines and the suspension of manufacturing at the McNeil Consumer Healthcare Fort Washington, Pa., facility as well as the currency devaluation in Venezuela. With respect to the ongoing remediation actions at the Fort Washington facility, Mr. Weldon stated, "We have made considerable progress, and are working diligently to reopen what will be a state of the art facility. Working across our production network, we have begun restoring the supply of some of the impacted children's medicines, which will increase in the coming months."

Worldwide Pharmaceutical sales of $5.5 billion for the third quarter represented an increase of 4.7% versus the prior year with operational growth of 5.9% and a negative impact from currency of 1.2%. Domestic sales increased 6.9%; international sales increased 2.0%, which reflected an operational increase of 4.6% and a negative currency impact of 2.6%.

Several products had strong operational growth including sales of REMICADE® (infliximab), a biologic approved for the treatment of a number of immune mediated inflammatory diseases; PREZISTA® (darunavir), a treatment for HIV; international sales of RISPERDAL® CONSTA® (risperidone) Long-Acting Treatment, an antipsychotic medication; INTELENCE® (etravirine), a next generation non-nucleoside reverse transcriptase inhibitor for HIV; and VELCADE® (bortezomib), a treatment for multiple myeloma.

Sales growth also includes the strong performance of newly launched products including STELARA™ (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis; SIMPONI™ (golimumab), a biologic approved to treat adults with moderate to severe rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis; and INVEGA® SUSTENNA™ (paliperidone palmitate), an extended-release injectable suspension for the acute and maintenance treatment of schizophrenia in adults.

During the quarter, the Company submitted new drug applications for TMC 278, a once-daily investigational non-nucleoside reverse transcriptase inhibitor (NNRTI) for the treatment of HIV, to the U.S. Food and Drug Administration and the European Medicines Agency. A supplemental Biologics License Application was also filed in the U.S. to expand the SIMPONI® (golimumab) label in rheumatoid arthritis (RA) to include inhibiting the progression of structural damage in the treatment of moderately to severely active RA.

In October, the Company entered into an agreement to acquire all outstanding equity of Crucell N.V. not already owned by the Company for approximately euro 1.75 billion in a cash tender offer. Crucell is a global biopharmaceutical company focused on the research & development, production and marketing of vaccines and antibodies against infectious disease worldwide.

Worldwide Medical Devices and Diagnostics sales of $5.9 billion for the third quarter represented an increase of 1.3% versus the prior year consisting of an operational increase of 1.9% and a negative currency impact of 0.6%. Domestic sales increased 1.2%; international sales increased 1.4%, which reflected an operational increase of 2.6% and a negative currency impact of 1.2%.

Primary contributors to operational growth included Ethicon's surgical care products; Ethicon Endo-Surgery's minimally invasive and advanced sterilization products; Biosense Webster's electrophysiology business; and DePuy's orthopaedic joint reconstruction business. This growth was partially offset by lower sales in the Cordis franchise, reflecting continued competition in the drug-eluting stent market.

During the quarter, the Company completed the acquisition of Micrus Endovascular, a global developer and manufacturer of minimally invasive devices for the treatment of hemorrhagic and ischemic stroke.

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 114,000 employees at more than 250 Johnson & Johnson companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.

NOTE TO INVESTORS

Johnson & Johnson will conduct a meeting 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

(This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. 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 Johnson & Johnson's expectations and projections. Risks and uncertainties include general industry conditions and competition; economic conditions, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; domestic and foreign health care reforms and governmental laws and regulations; and trends toward health care cost containment. 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 3, 2010. 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)	THIRD QUARTER						NINE MONTHS
			Percent Change						Percent Change
	2010	2009	Total		Operations	Currency	2010	2009	Total		Operations	Currency
Sales to customers by segment of business

Consumer
U.S.	$ 1,277	1,691	(24.5)	%	(24.5)	-	$ 4,300	5,125	(16.1)	%	(16.1)	-
International	2,290	2,298	(0.3)		0.4	(0.7)	6,680	6,429	3.9		0.5	3.4
	3,567	3,989	(10.6)		(10.2)	(0.4)	10,980	11,554	(5.0)		(6.9)	1.9

Pharmaceutical
U.S.	3,054	2,857	6.9		6.9	-	9,370	9,703	(3.4)		(3.4)	-
International	2,441	2,392	2.0		4.6	(2.6)	7,316	6,824	7.2		5.3	1.9
	5,495	5,249	4.7		5.9	(1.2)	16,686	16,527	1.0		0.2	0.8

Med Devices & Diagnostics
U.S.	2,800	2,766	1.2		1.2	-	8,551	8,194	4.4		4.4	-
International	3,120	3,077	1.4		2.6	(1.2)	9,726	9,071	7.2		4.5	2.7
	5,920	5,843	1.3		1.9	(0.6)	18,277	17,265	5.9		4.5	1.4

U.S.	7,131	7,314	(2.5)		(2.5)	-	22,221	23,022	(3.5)		(3.5)	-
International	7,851	7,767	1.1		2.6	(1.5)	23,722	22,324	6.3		3.7	2.6
Worldwide	$ 14,982	15,081	(0.7)	%	0.1	(0.8)	$ 45,943	45,346	1.3	%	0.0	1.3

Johnson & Johnson and Subsidiaries
Supplementary Sales Data

(Unaudited; Dollars in Millions)	THIRD QUARTER						NINE MONTHS
			Percent Change						Percent Change
	2010	2009	Total		Operations	Currency	2010	2009	Total		Operations	Currency
Sales to customers by geographic area

U.S.	$ 7,131	7,314	(2.5)	%	(2.5)	-	$ 22,221	23,022	(3.5)	%	(3.5)	-

Europe	3,629	3,879	(6.4)		1.8	(8.2)	11,563	11,522	0.4		2.6	(2.2)
Western Hemisphere excluding U.S.	1,424	1,338	6.4		1.7	4.7	4,079	3,615	12.8		2.5	10.3
Asia-Pacific, Africa	2,798	2,550	9.7		4.1	5.6	8,080	7,187	12.4		5.9	6.5
International	7,851	7,767	1.1		2.6	(1.5)	23,722	22,324	6.3		3.7	2.6

Worldwide	$ 14,982	15,081	(0.7)	%	0.1	(0.8)	$ 45,943	45,346	1.3	%	0.0	1.3

Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)	THIRD QUARTER

	2010			2009			Percent
			Percent			Percent	Increase
	Amount		to Sales	Amount		to Sales	(Decrease)
Sales to customers	$ 14,982		100.0	$ 15,081		100.0	(0.7)
Cost of products sold	4,594		30.7	4,434		29.4	3.6
Selling, marketing and administrative expenses	4,709		31.4	4,767		31.6	(1.2)
Research expense	1,657		11.1	1,617		10.7	2.5
Interest (income)expense, net	95		0.6	114		0.7
Other (income)expense, net	(292)		(2.0)	(96)		(0.6)
Earnings before provision for taxes on income	4,219		28.2	4,245		28.2	(0.6)
Provision for taxes on income	802		5.4	900		6.0	(10.9)
Net earnings	$ 3,417		22.8	$ 3,345		22.2	2.2

Net earnings per share (Diluted)	$ 1.23			$ 1.20			2.5

Average shares outstanding (Diluted)	2,786.4			2,793.0

Effective tax rate	19.0	%		21.2	%

Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)	NINE MONTHS

	2010			2009			Percent
			Percent			Percent	Increase
	Amount		to Sales	Amount		to Sales	(Decrease)
Sales to customers	$ 45,943		100.0	$ 45,346		100.0	1.3
Cost of products sold	13,752		29.9	13,135		29.0	4.7
Selling, marketing and administrative expenses	14,244		31.0	14,172		31.3	0.5
Research expense	4,862		10.6	4,773		10.5	1.9
Interest (income)expense, net	234		0.5	280		0.6
Other (income)expense, net	(1,868)		(4.0)	(165)		(0.4)
Earnings before provision for taxes on income	14,719		32.0	13,151		29.0	11.9
Provision for taxes on income	3,327		7.2	3,091		6.8	7.6
Net earnings	$ 11,392		24.8	$ 10,060		22.2	13.2

Net earnings per share (Diluted)	$ 4.08			$ 3.61			13.0

Average shares outstanding (Diluted)	2,792.0			2,787.9

Effective tax rate	22.6	%		23.5	%

Adjusted earnings before provision for taxes and net earnings
Earnings before provision for taxes on income	$ 13,379	(1)	29.1	$ 13,151		29.0	1.7
Net earnings	$ 10,415	(1)	22.7	$ 10,060		22.2	3.5
Net earnings per share (Diluted)	$ 3.73	(1)		$ 3.61			3.3
Effective tax rate	22.2	%		23.5	%
⁽¹⁾The difference between as reported earnings and as adjusted earnings before provision for taxes on income, net earnings and net earnings per share (diluted) is the exclusion of income from net litigation of $1,340 million, $977 million and $0.35 per share, respectively.

	REPORTED SALES vs. PRIOR PERIOD ($MM)
	THIRD QUARTER					NINE MONTHS
			% Change					% Change
	2010	2009	Reported	Operational ⁽¹⁾	Currency	2010	2009	Reported	Operational ⁽¹⁾	Currency
CONSUMER SEGMENT ⁽²⁾
SKIN CARE
US	311	370	-15.9%	-15.9%	-	1,185	1,204	-1.6%	-1.6%	-
Intl	489	472	3.6%	3.7%	-0.1%	1,378	1,313	5.0%	2.0%	3.0%
WW	800	842	-5.0%	-4.9%	-0.1%	2,563	2,517	1.8%	0.2%	1.6%
BABY CARE
US	104	102	2.0%	2.0%	-	306	308	-0.6%	-0.6%	-
Intl	462	442	4.5%	3.6%	0.9%	1,326	1,233	7.5%	3.3%	4.2%
WW	566	544	4.0%	3.3%	0.7%	1,632	1,541	5.9%	2.5%	3.4%
ORAL CARE
US	164	187	-12.3%	-12.3%	-	486	549	-11.5%	-11.5%	-
Intl	220	223	-1.3%	-2.2%	0.9%	651	612	6.4%	1.3%	5.1%
WW	384	410	-6.3%	-6.8%	0.5%	1,137	1,161	-2.1%	-4.8%	2.7%
OTC/NUTRITIONALS
US	438	732	-40.2%	-40.2%	-	1,472	2,137	-31.1%	-31.1%	-
Intl	671	666	0.8%	3.5%	-2.7%	1,985	1,919	3.4%	0.7%	2.7%
WW	1,109	1,398	-20.7%	-19.4%	-1.3%	3,457	4,056	-14.8%	-16.1%	1.3%
WOMEN'S HEALTH
US	121	142	-14.8%	-14.8%	-	404	443	-8.8%	-8.8%	-
Intl	338	360	-6.1%	-5.1%	-1.0%	990	963	2.8%	-0.4%	3.2%
WW	459	502	-8.6%	-7.9%	-0.7%	1,394	1,406	-0.9%	-3.1%	2.2%
WOUND CARE/OTHER
US	139	158	-12.0%	-12.0%	-	447	484	-7.6%	-7.6%	-
Intl	110	135	-18.5%	-18.5%	0.0%	350	389	-10.0%	-13.9%	3.9%
WW	249	293	-15.0%	-15.0%	0.0%	797	873	-8.7%	-10.4%	1.7%
TOTAL CONSUMER
US	1,277	1,691	-24.5%	-24.5%	-	4,300	5,125	-16.1%	-16.1%	-
Intl	2,290	2,298	-0.3%	0.4%	-0.7%	6,680	6,429	3.9%	0.5%	3.4%
WW	3,567	3,989	-10.6%	-10.2%	-0.4%	10,980	11,554	-5.0%	-6.9%	1.9%


See footnotes on last page


PHARMACEUTICAL SEGMENT ^{(2) (6)}
ACIPHEX/PARIET
US	116	131	-11.5%	-11.5%	-	356	397	-10.3%	-10.3%	-
Intl	124	130	-4.6%	0.8%	-5.4%	398	387	2.8%	2.0%	0.8%
WW	240	261	-8.0%	-5.3%	-2.7%	754	784	-3.8%	-4.2%	0.4%
CONCERTA
US	214	205	4.4%	4.4%	-	668	707	-5.5%	-5.5%	-
Intl	85	79	7.6%	9.3%	-1.7%	283	238	18.9%	14.3%	4.6%
WW	299	284	5.3%	5.8%	-0.5%	951	945	0.6%	-0.6%	1.2%
DURAGESIC/FENTANYL TRANSDERMAL
US	42	38	10.5%	10.5%	-	117	163	-28.2%	-28.2%	-
Intl	142	168	-15.5%	-14.2%	-1.3%	435	492	-11.6%	-13.4%	1.8%
WW	184	206	-10.7%	-9.6%	-1.1%	552	655	-15.7%	-17.1%	1.4%
LEVAQUIN/FLOXIN
US	274	294	-6.8%	-6.8%	-	926	1,045	-11.4%	-11.4%	-
Intl	12	17	-29.4%	-31.5%	2.1%	31	53	-41.5%	-44.2%	2.7%
WW	286	311	-8.0%	-8.1%	0.1%	957	1,098	-12.8%	-12.9%	0.1%
PREZISTA
US	102	78	30.8%	30.8%	-	290	215	34.9%	34.9%	-
Intl	128	73	75.3%	82.7%	-7.4%	331	198	67.2%	66.8%	0.4%
WW	230	151	52.3%	55.9%	-3.6%	621	413	50.4%	50.2%	0.2%
PROCRIT/EPREX
US	204	299	-31.8%	-31.8%	-	800	950	-15.8%	-15.8%	-
Intl	202	243	-16.9%	-11.9%	-5.0%	655	719	-8.9%	-9.2%	0.3%
WW	406	542	-25.1%	-22.9%	-2.2%	1,455	1,669	-12.8%	-12.9%	0.1%
REMICADE
US	857	822	4.3%	4.3%	-	2,420	2,330	3.9%	3.9%	-
US Exports ⁽³⁾	365	208	75.5%	75.5%	-	1,106	821	34.7%	34.7%	-
Intl	7	6	16.7%	16.7%	-	19	15	26.7%	26.7%	0.0%
WW	1,229	1,036	18.6%	18.6%	-	3,545	3,166	12.0%	12.0%	-
RISPERDAL/RISPERIDONE
US	(2)	35	-105.7%	-105.7%	-	(14)	223	-106.3%	-106.3%	-
Intl	123	157	-21.7%	-22.8%	1.1%	390	483	-19.3%	-21.7%	2.4%
WW	121	192	-37.0%	-37.9%	0.9%	376	706	-46.7%	-48.4%	1.7%
RISPERDAL CONSTA
US	108	129	-16.3%	-16.3%	-	340	386	-11.9%	-11.9%	-
Intl	270	224	20.5%	26.6%	-6.1%	772	640	20.6%	20.3%	0.3%
WW	378	353	7.1%	11.0%	-3.9%	1,112	1,026	8.4%	8.2%	0.2%
TOPAMAX
US	46	72	-36.1%	-36.1%	-	162	642	-74.8%	-74.8%	-
Intl	81	103	-21.4%	-18.1%	-3.3%	255	317	-19.6%	-20.5%	0.9%
WW	127	175	-27.4%	-25.4%	-2.0%	417	959	-56.5%	-56.8%	0.3%
VELCADE
US	-	-	-	-	-	-	-	0.0%	0.0%	-
Intl	246	231	6.5%	10.1%	-3.6%	793	652	21.6%	20.3%	1.3%
WW	246	231	6.5%	10.1%	-3.6%	793	652	21.6%	20.3%	1.3%
OTHER
US	728	546	33.3%	33.3%	-	2,199	1,824	20.6%	20.6%	-
Intl	1,021	961	6.2%	7.4%	-1.2%	2,954	2,630	12.3%	9.4%	2.9%
WW	1,749	1,507	16.1%	16.9%	-0.8%	5,153	4,454	15.7%	14.0%	1.7%
TOTAL PHARMACEUTICAL
US	3,054	2,857	6.9%	6.9%	-	9,370	9,703	-3.4%	-3.4%	-
Intl	2,441	2,392	2.0%	4.6%	-2.6%	7,316	6,824	7.2%	5.3%	1.9%
WW	5,495	5,249	4.7%	5.9%	-1.2%	16,686	16,527	1.0%	0.2%	0.8%
MAJOR NEW PHARM PRODUCTS ⁽⁴⁾
INVEGA
US	63	61	3.3%	3.3%	-	200	194	3.1%	3.1%	-
Intl	35	36	-2.8%	1.7%	-4.5%	108	93	16.1%	15.2%	0.9%
WW	98	97	1.0%	2.7%	-1.7%	308	287	7.3%	7.0%	0.3%


See footnotes on last page


MEDICAL DEVICES AND DIAGNOSTICS ⁽²⁾
CORDIS ⁽⁵⁾
US	246	233	5.6%	5.6%	-	762	731	4.2%	4.2%	-
Intl	350	407	-14.0%	-13.5%	-0.5%	1,161	1,251	-7.2%	-9.4%	2.2%
WW	596	640	-6.9%	-6.6%	-0.3%	1,923	1,982	-3.0%	-4.4%	1.4%
DEPUY
US	748	740	1.1%	1.1%	-	2,338	2,268	3.1%	3.1%	-
Intl	561	544	3.1%	4.8%	-1.7%	1,800	1,631	10.4%	7.3%	3.1%
WW	1,309	1,284	1.9%	2.6%	-0.7%	4,138	3,899	6.1%	4.8%	1.3%
DIABETES CARE
US	338	332	1.8%	1.8%	-	941	908	3.6%	3.6%	-
Intl	275	302	-8.9%	0.2%	-9.1%	885	877	0.9%	2.1%	-1.2%
WW	613	634	-3.3%	1.0%	-4.3%	1,826	1,785	2.3%	2.9%	-0.6%
ETHICON
US	480	439	9.3%	9.3%	-	1,499	1,296	15.7%	15.7%	-
Intl	592	580	2.1%	3.4%	-1.3%	1,852	1,717	7.9%	5.3%	2.6%
WW	1,072	1,019	5.2%	6.0%	-0.8%	3,351	3,013	11.2%	9.7%	1.5%
ETHICON ENDO-SURGERY
US	484	499	-3.0%	-3.0%	-	1,474	1,442	2.2%	2.2%	-
Intl	653	607	7.6%	8.4%	-0.8%	2,027	1,794	13.0%	9.9%	3.1%
WW	1,137	1,106	2.8%	3.3%	-0.5%	3,501	3,236	8.2%	6.5%	1.7%
ORTHO-CLINICAL DIAGNOSTICS
US	263	285	-7.7%	-7.7%	-	815	846	-3.7%	-3.7%	-
Intl	235	216	8.8%	9.2%	-0.4%	702	616	14.0%	11.1%	2.9%
WW	498	501	-0.6%	-0.4%	-0.2%	1,517	1,462	3.8%	2.6%	1.2%
VISION CARE
US	241	238	1.3%	1.3%	-	722	703	2.7%	2.7%	-
Intl	454	421	7.8%	4.0%	3.8%	1,299	1,185	9.6%	4.9%	4.7%
WW	695	659	5.5%	3.1%	2.4%	2,021	1,888	7.0%	4.0%	3.0%
TOTAL MEDICAL DEVICES AND DIAGNOSTICS
US	2,800	2,766	1.2%	1.2%	-	8,551	8,194	4.4%	4.4%	-
Intl	3,120	3,077	1.4%	2.6%	-1.2%	9,726	9,071	7.2%	4.5%	2.7%
WW	5,920	5,843	1.3%	1.9%	-0.6%	18,277	17,265	5.9%	4.5%	1.4%

⁽¹⁾Operational growth excludes the effect of currency
⁽²⁾Select areas (unaudited)
⁽³⁾Reported in U.S. sales
⁽⁴⁾Included in Other
⁽⁵⁾Includes sales of Drug-Eluting Stents for Q3 2010 of $47, $89 and $136MM Domestic, International and Worldwide respectively
Includes sales of Drug-Eluting Stents for Q3 2009 of $53, $158 and $211MM Domestic, International and Worldwide respectively
Includes sales of Drug-Eluting Stents for September YTD 2010 of $166, $327 and $493MM Domestic, International and Worldwide respectively
Includes sales of Drug-Eluting Stents for September YTD 2009 of $189, $507 and $696MM Domestic, International and Worldwide respectively
⁽⁶⁾Conforms to current presentation

SOURCE Johnson & Johnson