Business Charges drag down J&J 4Q profit, but sales rebound

Johnson & Johnson said Tuesday that fourth-quarter profit was barely a tenth what it made a year ago as a slew of charges for recalls, litigation and an acquisition dragged down income. But the health care giant's revenue jumped last year, ending an unprecedented two-year decline. After two tough years overshadowed by an embarrassing series of product recalls and other problems, the maker of Tylenol, prescription drugs and medical devices managed to beat Wall Street's forecast for adjusted profit and came in just below its revenue forecast. The company said net income was $218 million, or 8 cents per share, down from $1.94 billion, or 70 cents a share, a year earlier. Excluding charges, net income was $3.13 billion, or $1.13 per share. Revenue totaled $16.26 billion, up from $15.64 billion in 2010's fourth quarter. Analysts polled by FactSet, on average, expected earnings per share of $1.09 and revenue of $16.28 billion. Revenue fell 3.4 percent in the U.S., to $6.99 billion, but jumped 10.2 percent in foreign countries, to $9.27 billion. The U.S. decline was mostly due to an 8 percent drop in sales of prescription drugs, as two big sellers -- the powerful antibiotic Levaquin and Concerta for attention deficit hyperactivity disorder -- got generic competition in the middle of last year. Since September 2009, J&J has recalled a host of prescription and nonprescription medicines, as well as replacement hip joints, contact lenses and diabetes test strips. Among the recalls were tens of millions of bottles of children's and adult Tylenol and Motrin, Benadryl, Zyrtec, Rolaids and Simply Sleep pills. The prescription drug recalls have included HIV medicine Prezista and epilepsy pill Topamax. Reasons for the recalls have ranged from contamination with metal shards and glass particles, to nauseating odors and inaccurate levels of active drug ingredients. Published: Wed, Jan 25, 2012