JNJ reported EPS ahead of expectations due to lower taxes, strong sales of prescription drugs, and a improvement in sales of OTC drugs as some of the recall problems subside. Overall, sales increased 8.5% with currency hurting sales by 1.3%. Excluding currency and acquisitions/divestitures, sales increased 4.1%. Sales grew by more than 11% in the U.S. and Asia, but were only up 6.2% in Europe.
Core consumer sales increased 4.3% with OTC pharmaceuticals and nutritionals increasing 7.6% on an operational basis including a 14.4% increase in the U.S. Sales in the pharma area increased 12.4% including almost 15% of growth in the U.S. due to strong growth of 16% in the immunology business including Remicade/Simponi/Stelara (rheumatoid arthritis, psoriasis) and 35% growth in the oncology business due to 70% growth of Zytiga (prostate cancer). Procrit (anemia) sales declined by 14% due to market share losses. Core medical device sales were down 2.4% as the company saw double digit declines in diabetes and infection prevention with a 5% decline in diagnostics offset by cardiology sales increasing 6%+, electrophysiology up 12%+, and orthopedic up 4%+.
At the end of the 1st quarter, the company had $22 billion in cash and marketable securities offset by $16 billion in debt. Given all the adjustments, JNJ expects full year operational EPS of $5.33-5.43.