Elan sale bloats J&J's profits
Johnson & Johnson reported higher-than-expected quarterly earnings on strong demand for its prescription drugs and medical devices, but a big gain from the sale of a stake in Irish drugmaker Elan skewed the results.
"It looks like it was a great quarter, when it was really only a good quarter," said Edwards Jones analyst Judson Clark.
J&J posted a second-quarter gain of $213m (€162m) from the sale of Elan shares it acquired in 2009 as part of a deal to develop an Alzheimer's treatment.
The diversified healthcare company, which has large operations here, earned $3.8bn compared with $1.4bn a year earlier, when J&J took $2.2bn in charges for the writedown of research assets, litigation expenses and merger-related costs.
Analyst Larry Biegelsen said earnings beat estimates because of strong sales, a lower tax rate, improved profit margins and the Elan gain.
Revenue rose 8.5pc to $17.88bn, while Wall Street had been expecting $17.71bn.
"This report shows concerns about growth of J&J's device business are overblown," said Bill Smead, chief investment officer of Smead Capital.