Johnson & Johnson reports drop in revenue, profit for second quarter

Health-care giant Johnson & Johnson reported Tuesday that second-quarter overall revenue fell and profit dropped nearly 50 percent over the same time period in 2011.

Currency rates, acquisition and integration costs of recently-acquired medical device maker Synthes, Inc., and costs related to litigation for artificial hips and the anti-psychotic drug Risperdal were all factors that hurt the financial performance in the quarterly report.

The second-quarter sales were $16.5 billion, a decrease of 0.7 percent over the second quarter of 2011.

The second-quarter net earnings and diluted earnings per share were $1.408 billion and $0.50, respectively, the company said. The profit for the second quarter in 2011 was $2.776 billion, a difference of 49.3 percent.

J&J, which makes Band-Aids, prescription drugs and over-the-counter brands like Tylenol, is based in New Brunswick, N.J., and has multiple operations in the Philadelphia area.

J&J recently completed its largest acquisition in history, spending $19.7 billion for Synthes, whose U.S. headquarters is in West Chester, Chester County.

J&J's McNeil Consumer Healthcare division is based in Fort Washington, Montgomery County. The factory portion of that facility has not produced medicine for sale since April 2010 while having to recall dozens of products. The company is operating under a court-approved agreement with the U.S. Food and Drug Administration to more closely monitor repairs and the limited production in other McNeil facilities. The company is making some products, such as Tylenol and Motrin, in its plants in Lancaster and Puerto Rico.

New chief executive officer Alex Gorsky said in a conference call Tuesday with stock market analysts that repairs will continue through 2013.

The company altered its earnings guidance for full-year 2012 to $5.00 - $5.07 per share, which is lower than the previous guidance. The company said the change reflected the negative impact of current exchange rates.

J&J said worldwide consumer sales dropped 4.6 percent to $3.6 billion for the second quarter, with an operational increase of 0.6 percent and negative currency impact of 5.2 percent.

The company said international sales decreased 6 percent, reflecting an operational increase of 2 percent and negative currency impact of 8 percent.

However, domestic sales also decreased 1.9 percent.

In the two weeks between the June 14 closing of the Synthes deal and the end of the quarter on June 30, Synthes contributed one percent of the J&J sales total, the company said.

“The completion of the Synthes acquisition also marks an important milestone in strengthening our leadership in key health-care markets, creating a powerful portfolio of orthopedic and neurological solutions to advance patient health and well-being," Gorsky said in a statement.