Johnson & Johnson has been getting leaner and meaner in
hopes of improving the bottom line.
Judging by its Q2 earnings report, the strategy seems to be
working. In July, the company and Dow industrials component
reported strong second-quarter earnings. Profit growth
accelerated for the second straight quarter, rising 12% from a
year ago to $1.66 a share. Sales rose 9% to $19.5 billion.
Sales at its Pharmaceutical segment totaled $8.5 billion, up
21% from a year ago. Its newly-launched hepatitis C treatment
Olysio contributed sales of $831 million, while sales of its
prostate cancer treatment Zytiga totaled $562 million, up 42%
from a year ago.
Xarelto, an oral anticoagulant, is also doing well. Last
week,Johnson & Johnson (
) and its partner Bayer announced new studies to evaluate the
drug for new indications.
Sales at its Consumer segment edged 2% higher to $3.7 billion,
helped by strong sales of Tylenol and Motrin, skin care products
Neutrogena and Aveeno, and baby care products. Overseas, sales of
Listerine and feminine protection products did well.
Meanwhile, sales in its Medical Devices and Diagnostics unit
were sluggish again, up less than 1% to $7.2 billion.
Earlier this year, Johnson & Johnson sold its
Ortho-Clinical Diagnostics unit to private equity firm Carlyle
Group for just over $4 billion.
Last week, the Wall Street Journal reported that J&J is
also interested in selling its Cordis unit, which makes products
for vascular disease that include stents and catheters. The unit
could fetch as much as $1.5 billion to $2 billion.
J&J recently paid a quarterly dividend of 70 cents a
share, giving it an annual yield of 2.7%. It has been
consolidating gains since July. A flat base is in place that
shows an early buy point of 104.52. Shares closed Wednesday at
103.76, up 0.4%.