Johnson & Johnson doesn’t expect the recession’s effects to worsen and is counting on new drugs to stanch losses to generic rivals before the year ends, chief financial officer Dominic Caruso said.
J&J affirmed its 2009 profit forecast of $4.45 to $4.55 a share, showing the world's biggest health care company planned well for the sour economy, Mr Caruso said in an interview last night.
First-quarter sales sank 7.2 per cent, partly because of competition for the New Jersey-based company's prescription drugs and heart stents.
The slide should ease by the end of the year if J&J wins approvals for treatments for arthritis, psoriasis and blood clots, Caruso said.
The recession, and competition from generic copies of two of J&J's biggest drugs, "basically played out like we thought it was going to play out, and we were able to deliver very solid results," Mr Caruso said.
"I don't know how long the recession's going to last, but 'as expected' is a good comment."
Johnson & Johnson, the first major health-care company to report first-quarter results, rose 22 cents to $51.37 in New York Stock Exchange composite trading at 4.15pm.
The shares have lost 22 per cent in the last year. Federal Reserve Chairman Ben S. Bernanke said today in a speech that the "sharp decline" in the US economy is slowing, which may indicate a move toward the beginning of a recovery.
J&J's first-quarter profit of $3.5 billion, or $1.26 a share, beat analysts' estimates by 4 cents.
Earnings fell 2.5 per cent as generic rivals siphoned drug sales and the dollar's strength eroded the value of business outside the US.
J&J beat estimates by cutting jobs, research and administrative spending, said Michael Weinstein, a JPMorgan Chase & Co analyst, in a note.
"The company is clearly taking the necessary actions to maintain its profitability objectives in the face of a very challenging revenue environment," Mr Weinstein wrote.
J&J said last week it would cut about 900 jobs in its pharmaceutical unit, in addition to 4,400 positions it began paring in 2007.
Bloomberg