NEW BRUNSWICK, N.J., Oct. 17 /PRNewswire-FirstCall/ -- Johnson & Johnson today announced sales for the third quarter of $13.3 billion, an increase of 7.9% as compared to the third quarter of 2005. Operational growth was 6.7% with a positive currency impact of 1.2%. Domestic sales were up 7.5%, while international sales increased 8.5%, reflecting operational growth of 5.7% and a positive currency impact of 2.8%.
Net earnings and diluted earnings per share for the third quarter of 2006 were $2.8 billion and $.94, respectively. The third quarter included after- tax in-process research and development charges of $115 million associated with the acquisitions of Ensure Medical, Inc. and Colbar LifeScience Ltd. Excluding the impact of these charges, net earnings for the current quarter were $2.9 billion and diluted earnings per share were $.98, representing increases of 13.3% and 15.3%, respectively, as compared to the same period in 2005.*
“Each of our business segments -- pharmaceuticals, medical devices and diagnostics and consumer products -- contributed to our solid third-quarter results,” said William C. Weldon, Chairman and Chief Executive Officer. “Our strategic principle of being broadly based in human health care products continues to serve us well.”
Worldwide Medical Devices and Diagnostics sales of $5.0 billion for the third quarter represented a 7.1% increase over the prior year with operational growth of 6.1% and a positive impact from currency of 1.0%. Domestic sales increased 6.1%, while international sales increased 8.2% (6.1% from operations and 2.1% from currency).
Primary contributors to the operational growth included Ethicon Endo- Surgery’s minimally invasive products; Vistakon’s disposable contact lenses; DePuy’s orthopaedic joint reconstruction, sports medicine and trauma businesses; LifeScan’s blood glucose monitoring and insulin delivery products, and Ethicon’s wound care and women’s health products.
During the quarter, the Company announced the acquisition of Ensure Medical, Inc., a privately held company that develops devices for post- catheterization closure of the femoral artery. The Company also received approval from the U.S. Food and Drug Administration (FDA) to market its PRECISE Nitinol Stent and ANGIOGUARD Emboli Capture Guidewire to treat clogged neck arteries, known as carotid artery disease. In addition, the Company received CE Mark approval in Europe for CYPHER SELECT Sirolimus-eluting Stent for use in the treatment of severe arterial disease in the leg, the first drug-eluting stent to receive such an approval.
Worldwide Pharmaceutical sales of $5.9 billion for the third quarter represented an increase over the prior year of 7.8% with operational growth of 6.7% and a positive impact from currency of 1.1%. Domestic sales increased 8.9%, while international sales increased 5.7% (2.7% from operations and 3.0% from currency).
Sales growth reflects the strong performance of RISPERDAL, an antipsychotic medication; REMICADE, a biologic approved for the treatment of a number of immune mediated inflammatory diseases; TOPAMAX, an antiepileptic and a treatment for the prevention of migraine headaches, and CONCERTA, a treatment for attention deficit hyperactivity disorder.
During the quarter, the Company received an approvable letter from the FDA regarding a New Drug Application for paliperidone extended-release tablets for the treatment of schizophrenia. The FDA also approved REMICADE (infliximab) for the treatment of adult patients with chronic severe plaque psoriasis. In October, the Company received approval from the FDA to market RISPERDAL (risperidone) for the treatment of irritability associated with autistic disorder, marking the first FDA-approved treatment for children and adolescents afflicted with autistic disorder.
Also during the quarter, the Company entered into a licensing agreement with MGI PHARMA, INC. for the exclusive development and commercialization rights in all countries outside the United States, Canada and Mexico for DACOGEN (decitabine), an injectable product in European clinical development for acute myeloid leukemia and myelodysplastic syndromes.
Worldwide Consumer segment sales of $2.5 billion for the third quarter represented a 10.1% increase over the prior year with operational growth of 8.1% and a positive impact from currency of 2.0%. Domestic sales increased 5.9%, while international sales increased 14.0% (10.2% from operations and 3.8% from currency).
Sales results reflect McNeil Consumer’s launch of its reformulated TYLENOL over-the-counter upper respiratory products; international growth in skin care products primarily associated with the recent acquisition of Group Vendome, and strong growth in Baby & Child Care products.
Johnson & Johnson is the world’s most comprehensive and broadly based manufacturer of health care products, as well as a provider of related services, for the consumer, pharmaceutical, and medical devices and diagnostics markets. The more than 230 Johnson & Johnson operating companies employ approximately 115,700 men and women in 57 countries and sell products throughout the world.
* Net earnings and diluted earnings per share excluding in-process research and development charges are non-GAAP financial measures and should not be considered replacements for GAAP results. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the accompanying tables to this release. 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 Daylight Savings Time. A simultaneous webcast of the call for interested investors and others may be accessed by visiting the Johnson & Johnson website at www.jnj.com. A webcast and podcast replay will be available approximately two hours after the live webcast by visiting www.jnj.com and clicking on “Webcasts/Presentations” in the Investor Relations section.
(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 Company’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 the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2006. Copies of this Form 10-K, as well as subsequent filings, are available online at www.sec.gov or on request from the Company. The Company does not undertake to update any forward-looking statements as a result of new information or future events or developments.)
For more information on Johnson & Johnson, please visit the Company’s website at http://www.jnj.com.
Johnson & Johnson and Subsidiaries Supplementary Sales Data (Unaudited; Dollars in Millions) THIRD QUARTER Percent Change 2006 2005 Total Operations Currency Sales to customers by segment of business Consumer U.S. $1,138 1,075 5.9 % 5.9 - International 1,318 1,156 14.0 10.2 3.8 2,456 2,231 10.1 8.1 2.0 Pharmaceutical U.S. 3,841 3,527 8.9 8.9 - International 2,040 1,930 5.7 2.7 3.0 5,881 5,457 7.8 6.7 1.1 Med Devices & Diagnostics U.S. 2,509 2,365 6.1 6.1 - International 2,441 2,257 8.2 6.1 2.1 4,950 4,622 7.1 6.1 1.0 U.S. 7,488 6,967 7.5 7.5 - International 5,799 5,343 8.5 5.7 2.8 Worldwide $13,287 12,310 7.9 % 6.7 1.2 Johnson & Johnson and Subsidiaries Supplementary Sales Data (Unaudited; Dollars in Millions) NINE MONTHS Percent Change 2006 2005 Total Operations Currency Sales to customers by segment of business Consumer U.S. $3,391 3,281 3.4 % 3.4 - International 3,818 3,508 8.8 7.8 1.0 7,209 6,789 6.2 5.7 0.5 Pharmaceutical U.S. 11,224 10,905 2.9 2.9 - International 6,093 5,935 2.7 3.5 (0.8) 17,317 16,840 2.8 3.1 (0.3) Med Devices & Diagnostics U.S. 7,619 7,104 7.2 7.2 - International 7,497 7,171 4.5 6.5 (2.0) 15,116 14,275 5.9 6.9 (1.0) U.S. 22,234 21,290 4.4 4.4 - International 17,408 16,614 4.8 5.7 (0.9) Worldwide $39,642 37,904 4.6 % 5.0 (0.4) Johnson & Johnson and Subsidiaries Supplementary Sales Data (Unaudited; Dollars in Millions) THIRD QUARTER Percent Change 2006 2005 Total Operations Currency Sales to customers by geographic area U.S. $7,488 6,967 7.5 % 7.5 - Europe 3,098 2,860 8.3 3.8 4.5 Western Hemisphere excluding U.S. 901 783 15.1 10.6 4.5 Asia-Pacific, Africa 1,800 1,700 5.9 6.7 (0.8) International 5,799 5,343 8.5 5.7 2.8 Worldwide $13,287 12,310 7.9 % 6.7 1.2 Johnson & Johnson and Subsidiaries Supplementary Sales Data (Unaudited; Dollars in Millions) NINE MONTHS Percent Change 2006 2005 Total Operations Currency Sales to customers by geographic area U.S. $22,234 21,290 4.4 % 4.4 - Europe 9,464 9,222 2.6 4.5 (1.9) Western Hemisphere excluding U.S. 2,599 2,259 15.1 8.6 6.5 Asia-Pacific, Africa 5,345 5,133 4.1 6.6 (2.5) International 17,408 16,614 4.8 5.7 (0.9) Worldwide $39,642 37,904 4.6 % 5.0 (0.4) Johnson & Johnson and Subsidiaries (1) Condensed Consolidated Statement of Earnings (Unaudited; in Millions Except Per Share Figures) THIRD QUARTER 2006 2005 Percent Percent Percent Increase Amount to Sales Amount to Sales (Decrease) Sales to customers $13,287 100.0 $12,310 100.0 7.9 Cost of products sold 3,650 27.5 3,354 27.2 8.8 Selling, marketing and administrative expenses 4,291 32.3 4,161 33.8 3.1 Research expense 1,719 12.9 1,539 12.5 11.7 In-process research & development 115 0.9 - - Interest (income) expense, net (194) (1.5) (101) (0.8) Other (income) expense, net 45 0.3 (63) (0.5) Earnings before provision for taxes on income 3,661 27.6 3,420 27.8 7.0 Provision for taxes on income 901 6.8 882 7.2 2.2 Net earnings $2,760 20.8 $2,538 20.6 8.7 Net earnings per share (Diluted) $0.94 $0.85 10.6 Average shares outstanding (Diluted) 2,948.1 3,006.2 Effective tax rate 24.6 % 25.8 % Adjusted earnings before provision for taxes and net earnings Earnings before provision for taxes on income $3,776 (2) 28.4 $3,420 27.8 10.4 Net earnings $2,875 (2) 21.6 $2,538 20.6 13.3 Net earnings per share (Diluted) $0.98 (2) $0.85 15.3 Effective tax rate 23.9% 25.8% (1) The company has adopted SFAS No. 123 (R), Share Based Payment, applying the modified retrospective transition method. Previously reported financial statements have been restated accordingly. (2) The difference between as reported earnings before provision for taxes on income and net earnings and net earnings per share (diluted) and adjusted earnings before provision for taxes on income and net earnings and net earnings per share (diluted) is the exclusion of IPR&D of $115 million with no tax benefit and $0.04 per share, respectively. Johnson & Johnson and Subsidiaries (1) Condensed Consolidated Statement of Earnings (Unaudited; in Millions Except Per Share Figures) NINE MONTHS 2006 2005 Percent Percent Percent Increase Amount to Sales Amount to Sales (Decrease) Sales to customers $39,642 100.0 $37,904 100.0 4.6 Cost of products sold 11,050 27.9 10,372 27.4 6.5 Selling, marketing and administrative expenses 12,737 32.1 12,566 33.2 1.4 Research expense 5,079 12.8 4,448 11.7 14.2 In-process research & development 239 0.6 353 0.9 Interest (income) expense, net (571) (1.4) (264) (0.7) Other (income) expense, net (771) (2.0) (184) (0.5) Earnings before provision for taxes on income 11,879 30.0 10,613 28.0 11.9 Provision for taxes on income 2,994 7.6 2,648 7.0 13.1 Net earnings $8,885 22.4 $7,965 21.0 11.6 Net earnings per share (Diluted) $2.99 $2.65 12.8 Average shares outstanding (Diluted) 2,971.3 3,008.4 Effective tax rate 25.2 % 25.0 % Adjusted earnings before provision for taxes and net earnings Earnings before provision for taxes on income $11,496 (2) 29.0 $10,966 (3) 28.9 4.8 Net earnings $8,748 (2) 22.1 $8,093 (3) 21.4 8.1 Net earnings per share (Diluted) $2.95 (2) $2.69 (3) 9.7 Effective tax rate 23.9 % 26.2 % (1) The company has adopted SFAS No. 123 (R), Share Based Payment, applying the modified retrospective transition method. Previously reported financial statements have been restated accordingly. (2) The difference between as reported earnings before provision for taxes on income and net earnings and net earnings per share (diluted) and adjusted earnings before provision for taxes on income and net earnings and net earnings per share (diluted) is the exclusion of the Guidant acquisition termination fee of $622 million before tax and $368 million after tax and $0.12 per share, respectively, and the exclusion of IPR&D of $239 million before tax and $231 million after tax and $0.08 per share, respectively. (3) The difference between as reported earnings before provision for taxes on income and net earnings and net earnings per share (diluted) and adjusted earnings before provision for taxes on income and net earnings and net earnings per share (diluted) is the exclusion of IPR&D of $353 million before tax with no tax benefit and $0.12 per share, and the exclusion of a $225 million tax gain and $0.08 per share, due to the reversal of a tax liability related to a technical correction associated with the American Jobs Creation Act of 2004.
Johnson & Johnson
CONTACT: Press Contact: Jeffrey J. Leebaw, +1-732-524-3350, Home,+1-732-821-6007; or Investor Contacts: Louise Mehrotra, +1-732-524-6491, orStan Panasewicz, +1-732-524-2524, or Lesley Fishman, +1-732-524-3922
Web site: http://www.jnj.com/
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