J&J off target as recall of medicines slashes sales
SALES at Johnson & Johnson missed expectations and the world's largest healthcare company again cut its 2010 profit forecast yesterday, citing recalls of Tylenol and other medicines which, it said, are the subject of a US criminal investigation.
Four recalls in the past year hurt the company, as did the late April closure of a plant in Pennsylvania, where 40 childrens products ran foul of US regulators' quality-control safeguards and were taken off the market, J&J added as it unveiled first quarter results.
The recalls slashed quarterly sales by $200m and the plant closing will likely undermine full-year sales by $600m, chief financial officer Dominic Caruso told investors.
The drug maker, which has six plants in Ireland and employs 2,000 people, forecast 2010 profit, excluding special items, would now be between $4.65 to $4.75 a share, down from its April projection of $4.80 to $4.90. The company blamed foreign currency exchange rates for the decrease, along with the effects of the recalls. Shares in J&J dropped 2.4pc in early trading in New York, the biggest intraday decline since June 4.
The company was also hit by the decline in the euro in the first three months. J&J derived 26pc of its first-quarter sales from Europe. The euro weakened 6.6pc against the dollar in the second quarter, from the same period a year ago. One euro bought $1.27 from April 1 through June 30 this year, on average, while last year it bought $1.36.
J&J has six IDA-supported operations in Ireland, producing medical devices and contact lenses, along with an Irish sales and marketing company in Dublin and a treasury operation at the IFSC.