April 19, 2011

Johnson & Johnson Reports 2011 First-Quarter Results

Sales of $16.2 Billion Increased 3.5% Versus 2010 First-Quarter; First Quarter EPS was $1.25
Excluding Special Items, 2011 First-Quarter EPS of $1.35 Increased 4.7%*

NEW BRUNSWICK, N.J., April 19, 2011 /PRNewswire-FirstCall/ -- Johnson & Johnson (NYSE: JNJ) today announced sales of $16.2 billion for the first quarter of 2011, an increase of 3.5% as compared to the first quarter of 2010. Operational results increased 1.8% and the positive impact of currency was 1.7%. Domestic sales declined 0.6%, while international sales increased 7.3%, reflecting operational growth of 4.1% and a positive currency impact of 3.2%.

Net earnings and diluted earnings per share for the first quarter of 2011 were $3.5 billion and $1.25, respectively. First quarter 2011 net earnings included after-tax charges of $271 million representing expenses due to litigation and additional DePuy ASR™ Hip recall costs.  First quarter 2010 net earnings included an after-tax gain of $910 million representing the net impact of litigation matters. Excluding these special items, net earnings for the current quarter were $3.7 billion and diluted earnings per share were $1.35, representing increases of 3.6% and 4.7%, respectively, as compared to the same period in 2010.*  

The Company increased its earnings guidance for full-year 2011 to $4.90 - $5.00 per share, reflecting both currency exchange rate changes and recent developments in the business.  The Company's guidance excludes the impact of special items.

"Our pharmaceuticals business demonstrated strong growth this quarter led by the performance of recently launched products. We delivered solid earnings while making the investments necessary to advance the robust pipelines across our businesses," said William C. Weldon, Chairman and Chief Executive Officer.

"The innovations we are bringing to the market, the changes we are implementing in manufacturing and quality, and the dedication of the people of Johnson & Johnson, give us great confidence in the future growth prospects of our business," said Weldon.

Worldwide Consumer sales of $3.7 billion for the first quarter represented a decrease of 2.2% versus the prior year consisting of an operational decline of 4.1% and a positive impact from currency of 1.9%. Domestic sales decreased 13.8%; international sales increased 5.9%, which reflected an operational increase of 2.6% and a positive currency impact of 3.3%.

Sales in U.S. over-the-counter medicines were significantly impacted by the suspension of manufacturing at the McNeil Consumer Healthcare facility in Fort Washington, Pa., as well as the impact on production volumes related to ongoing efforts to enhance quality and manufacturing systems. Positive contributors to operational results were international sales of over-the-counter medicines and nutritionals, baby care products, and international sales of oral care products.  

During the quarter, McNeil—PPC, Inc. signed a Consent Decree with the U.S. Food and Drug Administration (FDA), which will govern certain McNeil Consumer Healthcare division manufacturing operations. The Consent Decree allows McNeil to continue the work already initiated under a Comprehensive Action Plan, and identifies procedures that will help provide additional assurance of product quality to the FDA.

Worldwide Pharmaceutical sales of $6.1 billion for the first quarter represented an increase of 7.5% versus the prior year with operational growth of 6.4% and a positive impact from currency of 1.1%. Domestic sales increased 5.8%; international sales increased 9.7%, which reflected an operational increase of 7.3% and a positive currency impact of 2.4%.  

Sales results include the strong performance of recently 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) a once-monthly, long-acting, injectable atypical antipsychotic for the acute and maintenance treatment of schizophrenia in adults.

Several other products also contributed to the operational sales growth including REMICADE® (infliximab), a biologic approved for the treatment of a number of immune mediated inflammatory diseases; PREZISTA® (darunavir), a treatment for HIV; CAELYX®  (pegylated liposomal doxorubicin hydrochloride), a treatment for certain types of cancer; LEVAQUIN®   (levofloxacin), a treatment for bacterial infections; and international sales of RISPERDAL® CONSTA® (risperidone), a long-acting injectable for the management of Bipolar I Disorder and schizophrenia.

During the quarter, the European Commission approved XEPLION® (paliperidone palmitate), a once monthly, long-acting injectable, antipsychotic, for the treatment of schizophrenia. In addition, the Company completed its tender offer for Crucell N.V., a global biopharmaceutical company focused on the research & development, production and marketing of vaccines and antibodies against infectious disease worldwide. Crucell now operates as the center for vaccines within the Johnson & Johnson pharmaceuticals group.

In April, the Company announced it had reached an agreement with Merck to amend the distribution rights to REMICADE® (infliximab) and SIMPONI® (golimumab), which treat chronic inflammatory diseases such as rheumatoid arthritis. The agreement concludes the arbitration proceeding initiated in 2009, requesting a ruling related to the distribution agreement following the announcement of the proposed merger between Merck and Schering-Plough.

Worldwide Medical Devices and Diagnostics sales of $6.4 billion for the first quarter represented an increase of 3.3% versus the prior year consisting of an operational increase of 1.3% and a positive currency impact of 2.0%. Domestic sales decreased 0.5%; international sales increased 6.6%, which reflected an operational increase of 3.0% and a positive currency impact of 3.6%.

Primary contributors to operational growth included Biosense Webster's electrophysiology business; LifeScan's blood glucose monitoring products; Vistakon's disposable contact lenses; Ethicon's surgical care products; Ethicon Endo-Surgery's advanced sterilization products and international sales of minimally invasive products; and DePuy's sports medicine and neurovascular business.  

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 115,000 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.

* Net earnings and diluted earnings per share excluding special items are non-GAAP financial measures and should not be considered replacements for GAAP results. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the Investor Relations section of the Company's website at www.investor.jnj.com.

NOTE TO INVESTORS

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

(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 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 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; trends toward health care cost containment; and increased scrutiny of the healthcare industry by government agencies.  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 2, 2011.  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


2011


2010


Total


Operations


Currency

Sales to customers by










segment of business




















Consumer










   U.S.

$              1,345


1,560


(13.8)

%

(13.8)


-

   International

2,337


2,206


5.9


2.6


3.3


3,682


3,766


(2.2)


(4.1)


1.9











Pharmaceutical










   U.S.

3,391


3,206


5.8


5.8


-

   International

2,668


2,432


9.7


7.3


2.4


6,059


5,638


7.5


6.4


1.1











Med Devices & Diagnostics










   U.S.

2,872


2,886


(0.5)


(0.5)


-

   International

3,560


3,341


6.6


3.0


3.6


6,432


6,227


3.3


1.3


2.0











U.S.

7,608


7,652


(0.6)


(0.6)


-

International

8,565


7,979


7.3


4.1


3.2

Worldwide

$            16,173


15,631


3.5

%

1.8


1.7



Johnson & Johnson and Subsidiaries

Supplementary Sales Data


(Unaudited; Dollars in Millions)


FIRST QUARTER







Percent Change



2011


2010


Total


Operations


Currency

Sales to customers by











geographic area






















U.S.


$              7,608


7,652


(0.6)

%

(0.6)


-












Europe


4,183


4,102


2.0


1.9


0.1

Western Hemisphere excluding U.S.


1,436


1,280


12.2


7.3


4.9

Asia-Pacific, Africa


2,946


2,597


13.4


6.3


7.1

International


8,565


7,979


7.3


4.1


3.2












Worldwide


$            16,173


15,631


3.5

%

1.8


1.7



Johnson & Johnson and Subsidiaries

Condensed Consolidated Statement of Earnings


(Unaudited; in Millions Except Per Share Figures)

FIRST QUARTER


2011 ACT


2010 ACT


Percent




Percent




Percent


Increase


Amount


to Sales


Amount


to Sales


(Decrease)

Sales to customers

$ 16,173


100.0


$       15,631


100.0


3.5

Cost of products sold

4,778


29.5


4,528


29.0


5.5

Selling, marketing and administrative expenses

5,056


31.3


4,779


30.5


5.8

Research and development expense

1,738


10.8


1,557


10.0


11.6

Interest (income)expense, net

104


0.6


81


0.5


28.4

Other (income)expense, net

(13)


(0.1)


(1,594)


(10.2)



Earnings before provision for taxes on income

4,510


27.9


6,280


40.2


(28.2)

Provision for taxes on income

1,034


6.4


1,754


11.2


(41.0)

Net earnings

$   3,476


21.5


$         4,526


29.0


(23.2)





















Net earnings per share  (Diluted)

$     1.25




$           1.62




(22.8)











Average shares outstanding  (Diluted)

2,772.7




2,797.3















Effective tax rate

22.9

%



27.9

 %














Adjusted earnings before provision for taxes and net earnings










    Earnings before provision for taxes on income

$   4,856

(1)

30.0


$         4,783

(2)

30.6


1.5

    Net earnings

$   3,747

(1)

23.2


$         3,616

(2)

23.1


3.6

    Net earnings per share  (Diluted)

$     1.35

(1)



$           1.29

(2)



4.7

    Effective tax rate

22.8%




24.4%





(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 expense due to litigation ($291 million) and additional DePuy ASR™ Hip recall costs ($55 million) of $346 million, $271 million and $0.10 per share, respectively.

(2) 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 $1,497 million, $910 million and $0.33 per share, respectively.



REPORTED SALES vs. PRIOR PERIOD ($MM)








FIRST QUARTER




% Change


2011

2010

Reported

Operational (1)

Currency

CONSUMER SEGMENT (2)






BABY CARE






US

105

103

1.9%

1.9%

-

Intl

456

426

7.0%

3.3%

3.7%

WW

561

529

6.0%

3.1%

2.9%

ORAL CARE






US

163

174

-6.3%

-6.3%

-

Intl

228

207

10.1%

5.6%

4.5%

WW

391

381

2.6%

0.2%

2.4%

OTC/NUTRITIONALS






US

397

542

-26.8%

-26.8%

-

Intl

732

665

10.1%

6.9%

3.2%

WW

1,129

1,207

-6.5%

-8.2%

1.7%

SKIN CARE






US

426

452

-5.8%

-5.8%

-

Intl

473

468

1.1%

-1.7%

2.8%

WW

899

920

-2.3%

-3.7%

1.4%

WOMEN'S HEALTH






US

125

146

-14.4%

-14.4%

-

Intl

334

323

3.4%

0.7%

2.7%

WW

459

469

-2.1%

-4.0%

1.9%

WOUND CARE/OTHER






US

129

143

-9.8%

-9.8%

-

Intl

114

117

-2.6%

-6.9%

4.3%

WW

243

260

-6.5%

-8.4%

1.9%

TOTAL CONSUMER






US

1,345

1,560

-13.8%

-13.8%

-

Intl

2,337

2,206

5.9%

2.6%

3.3%

WW

3,682

3,766

-2.2%

-4.1%

1.9%













See footnotes on last page


















PHARMACEUTICAL SEGMENT  (2) (5)






ACIPHEX/PARIET






US

109

119

-8.4%

-8.4%

-

Intl

130

141

-7.8%

-8.8%

1.0%

WW

239

260

-8.1%

-8.6%

0.5%

CONCERTA






US

254

231

10.0%

10.0%

-

Intl

108

98

10.2%

6.3%

3.9%

WW

362

329

10.0%

8.8%

1.2%

DOXIL/CAELYX






US

64

72

-11.1%

-11.1%

-

Intl

75

8

*

*

20.2%

WW

139

80

73.8%

71.6%

2.2%

DURAGESIC/FENTANYL TRANSDERMAL






US

4

38

-89.5%

-89.5%

-

Intl

123

146

-15.8%

-18.9%

3.1%

WW

127

184

-31.0%

-33.4%

2.4%

LEVAQUIN/FLOXIN






US

422

363

16.3%

16.3%

-

Intl

12

8

50.0%

44.5%

5.5%

WW

434

371

17.0%

16.9%

0.1%

PREZISTA






US

126

89

41.6%

41.6%

-

Intl

140

98

42.9%

42.3%

0.6%

WW

266

187

42.2%

41.9%

0.3%

PROCRIT/EPREX






US

190

290

-34.5%

-34.5%

-

Intl

207

233

-11.2%

-12.3%

1.1%

WW

397

523

-24.1%

-24.6%

0.5%

REMICADE






US

788

780

1.0%

1.0%

-

US Exports (3)

490

400

22.5%

22.5%

-

Intl

7

6

16.7%

16.7%

0.0%

WW

1,285

1,186

8.3%

8.3%

0.0%

RISPERDAL/RISPERIDONE






US

8

5

60.0%

60.0%

-

Intl

119

133

-10.5%

-14.6%

4.1%

WW

127

138

-8.0%

-12.0%

4.0%

RISPERDAL CONSTA






US

114

117

-2.6%

-2.6%

-

Intl

290

262

10.7%

9.1%

1.6%

WW

404

379

6.6%

5.5%

1.1%

TOPAMAX






US

50

57

-12.3%

-12.3%

-

Intl

79

91

-13.2%

-14.4%

1.2%

WW

129

148

-12.8%

-13.5%

0.7%

VELCADE






US

-

-

-

-

-

Intl

280

261

7.3%

5.6%

1.7%

WW

280

261

7.3%

5.6%

1.7%

OTHER






US

772

645

19.7%

19.7%

-

Intl

1,098

947

15.9%

12.7%

3.2%

WW

1,870

1,592

17.5%

15.6%

1.9%

TOTAL PHARMACEUTICAL






US

3,391

3,206

5.8%

5.8%

-

Intl

2,668

2,432

9.7%

7.3%

2.4%

WW

6,059

5,638

7.5%

6.4%

1.1%

MAJOR NEW PHARM PRODUCTS (4)






INTELENCE






US

38

31

22.6%

22.6%

-

Intl

31

24

29.2%

28.3%

0.9%

WW

69

55

25.5%

25.1%

0.4%

INVEGA






US

69

69

0.0%

0.0%

-

Intl

51

39

30.8%

27.9%

2.9%

WW

120

108

11.1%

10.1%

1.0%

SIMPONI






US

53

39

35.9%

35.9%

-

Intl

42

3

*

*

-17.4%

WW

95

42

*

*

-1.2%

STELARA






US

105

56

87.5%

87.5%

-

Intl

61

31

96.8%

94.9%

1.9%

WW

166

87

90.8%

90.1%

0.7%







See footnotes on last page


















MEDICAL DEVICES AND DIAGNOSTICS   (2)






CORDIS






US

242

251

-3.6%

-3.6%

-

Intl

393

421

-6.7%

-9.9%

3.2%

WW

635

672

-5.5%

-7.5%

2.0%

DEPUY






US

811

814

-0.4%

-0.4%

-

Intl

692

640

8.1%

4.2%

3.9%

WW

1,503

1,454

3.4%

1.7%

1.7%

DIABETES CARE






US

311

290

7.2%

7.2%

-

Intl

326

307

6.2%

4.9%

1.3%

WW

637

597

6.7%

6.0%

0.7%

ETHICON






US

516

510

1.2%

1.2%

-

Intl

677

637

6.3%

3.3%

3.0%

WW

1,193

1,147

4.0%

2.3%

1.7%

ETHICON ENDO-SURGERY






US

471

483

-2.5%

-2.5%

-

Intl

750

685

9.5%

6.0%

3.5%

WW

1,221

1,168

4.5%

2.4%

2.1%

ORTHO-CLINICAL DIAGNOSTICS






US

265

288

-8.0%

-8.0%

-

Intl

256

237

8.0%

4.1%

3.9%

WW

521

525

-0.8%

-2.5%

1.7%

VISION CARE






US

256

249

2.8%

2.8%

-

Intl

466

415

12.3%

5.9%

6.4%

WW

722

664

8.7%

4.7%

4.0%

TOTAL MEDICAL DEVICES AND DIAGNOSTICS






US

2,872

2,886

-0.5%

-0.5%

-

Intl

3,560

3,341

6.6%

3.0%

3.6%

WW

6,432

6,227

3.3%

1.3%

2.0%







* Percentage greater than 100%

(1) Operational growth excludes the effect of currency

(2) Select areas (unaudited)  

(3) Reported in U.S. sales

(4) Included in Other

(5) Prior year amounts have been reclassified to conform to current presentation



SOURCE Johnson & Johnson

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