A big jump in prescription drug sales, particularly overseas, helped Johnson & Johnson swing to a large fourth-quarter profit after posting a huge loss a year ago, when it took a $13.6 billion charge related to the late-2017 U.S. tax overhaul.
The world’s biggest maker of health care products also benefited from an effective tax rate of just 2.6 percent for the latest quarter, along with reduced spending on research and development. It topped Wall Street profit and revenue expectations.
The maker of baby shampoo and biotech drugs on Tuesday reported net income of $3.04 billion, or $1.12 per share, for 2018’s fourth quarter. A year earlier, J&J reported a rare net loss — $10.71 billion, or $3.00 per share. That was due to the $13.6 billion charge, for a tax payment on years of accumulated foreign earnings, amounting to more than $66 billion, brought back to the U.S. at low tax rates.
Earnings in the latest quarter, adjusted for one-time gains and costs, came to $1.97 per share, or 2 cents better than industry analysts expected, according to a survey by Zacks Investment Research.
The New Brunswick, New Jersey- based company said revenue totaled $20.39 billion, also edging out expectations, though that was just 1 percent higher than 2017’s fourth quarter.
As usual, J&J’s prescription drug business drove the strong performance, with sales jumping 5.3 percent to $10.19 billion. Sales of cancer drugs including Darzalex, Imbruviga and Zytiga jumped 22 percent to a total of $2.49 billion, and sales of Remicade, Simponi and Stelara, for rheumatoid arthritis and other immune disorders, rose 8.3 percent to a total of $3.34 billion.
Johnson & Johnson’s consumer health business posted flat sales of $3.54 billion, while the medical devices and diagnostics business, which the company has been revamping for a couple years, saw sales drop 4.4 percent to $6.67 billion.
Johnson & Johnson expects full-year earnings between $8.50 and $8.65 per share, with revenue between $80.4 billion and $81.2 billion. Industry analysts have projected per-share earnings of $8.60 and revenue of about $82.6 billion.