Johnson & Johnson Sees 1st-Quarter Charge On Venezuela Devaluation

By Tess Stynes

Johnson & Johnson ( JNJ ) said it expects to post a first-quarter charge of roughly $100 million related to Venezuela's recent devaluation of its currency, the latest in a broad range of major U.S. companies anticipating an impact from the move.

Venezuela, which faces a hefty budget deficit in the wake of a government-led spending boom, recently said it plans to sharply lower the value of the local currency, known as the bolivar. Foreign companies operating in the country are also facing strict currency controls that limit the repatriation of profits.

J&J expects the weakening Venezuela's currency to hurt its first-quarter per-share earnings by about four cents, though the health-products giant doesn't expect it to affect its full-year earnings outlook.

In January, J&J reported a surge in fourth-quarter earnings from a year-earlier period that was weighed down by legal costs, while an acquisition helped sales rise 8%. At the time, the company, which is trying to bounce back from a series of product recalls, had lighter-than-expected quarterly sales and issued a forecast for 2013 earnings that fell slightly short of Wall Street expectations.

Among the other companies that have outlined charges tied to Venezuela's move are Merck & Co. (MRK), Colgate-Palmolive Co. (CL), Halliburton Co. (HAL) and Procter & Gamble Co. (PG).

Shares closed Friday at $76.25 and were inactive premarket. The stock is up roughly 8.8% this year.

Write to Tess Stynes at Tess.Stynes@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

  (END) Dow Jones Newswires
  02-25-130844ET
  Copyright (c) 2013 Dow Jones & Company, Inc.