J&J Beats but Projects Disappointing Earnings; Shares Waver Early

[Stocks-to-Watch]

Johnson & Johnson (JNJ) beat analysts’ earnings expectations for the fourth quarter, but its forecast came in below expectations as currency pressures could depress 2012 results. Shares fluctuated between slight gains and slight losses in early trading Tuesday.

Johnson & Johnson posted 8 cents of EPS, an 89% drop from last year’s results. After excluding litigation and liability expenses, along with other one-time issues, the company reported $1.13 in EPS, 4 cents ahead of expectations. Revenue of $16.26 billion was in line with expectations.

Recalls and production issues, including the suspension of a Pennsylvania plant that made over the counter medicines, continued to plague the company. Currency, which had boosted earnings for much of the year, hurt results in the quarter as a stronger U.S. dollar made revenue earned overseas less valuable.

Nonetheless, J&J showed growth in all its major segments. The company’s worldwide consumer sales rose 1.6% in the quarter to $3.67 billion, which included 2.7% operational growth and a 1.1% currency headwind. Pharmaceutical sales rose 6.7% and medical device & diagnostics sales rose 2.7%.

The company’s gross margin fell to 67.2% from 67.8%.

Johnson & Johnson said it expects to earn $5.05 to $5.15 per share in 2012, below expectations for $5.21. “This guidance reflects operational growth of approximately 3.5% to 5.5% partially offset by an estimated negative impact of currency of approximately 2.5%,” the company said in a statement.



Original Article Source by Barrons.com