By Dow Jones Business News, February 25, 2013, 08:44:00 AM EDT
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
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
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