Johnson & Johnson reported better-than-expected quarterly results on Tuesday as a big jump in sales of its cancer drugs helped offset a weaker performance from its medical-device and consumer businesses.
For the third quarter, J&J’s net income rose to $3.93 billion, or $1.44 per share, from $3.76 billion, or $1.37 per share, a year earlier. Excluding items, the company earned $2.05 per share, above analysts’ estimates of $2.03.
Net sales increased 3.6% to $20.35 billion, beating expectations of $20.05 billion.
“We are pleased with our strong third-quarter performance, which reflects continued above-market growth in our pharmaceutical business, accelerating sales momentum in our consumer business and consistent progress in our medical-devices business,” CEO Alex Gorsky said in a news release.
Pharmaceutical sales rose 6.7% to $10.3 billion globally, reflecting in part a 36% gain in sales of cancer drugs, which include Zytiga for prostate cancer and blood-cancer treatments Darzalex and Imbruvica.
But consumer product sales increased only 1.8% to $3.4 billion in the third quarter while medical-device sales fell 0.2% to $6.6 billion.
“Our positive view on pharma is offset by ongoing challenges to the company’s medical-device and consumer franchises,” JPMorgan analyst Chris Schott wrote in a research note. “While today’s consumer results were encouraging, we believe it remains too early to call for a broad recovery in these businesses.”
The consumer business benefited from the revamp of J&J’s iconic baby care line, which, as CNBC reports, was relaunched in August “after losing ground to niche upstart brands and facing a 20 percent sales decline since 2011.”
“It’s much more receptive to the needs of millennial moms and dads in terms of the formulation and packaging,” CFO Joe Wolk told CNBC.
Declines in sales of diabetes-care and orthopedics products weighed on the medical-device division. “J&J executives said they weren’t satisfied with the performance of the medical-device unit, and are pursuing ways to jump-start growth,” The Wall Street Journal noted.
For full-year 2018, J&J raised its earnings guidance to a range of $8.13 to $8.18 per share.