Sales of $17.8 Billion Decreased 8.8% Versus 2014 Second Quarter
Second-Quarter EPS was $1.61| Adjusted 2015 Second-Quarter EPS of $1.71 Decreased 3.9%* | Solid Underlying Growth Offset by Currency and Divestitures
Net earnings and diluted earnings per share for the second quarter of 2015 were
$4.5 billion and $1.61, respectively. Second quarter 2015 net earnings included after-tax intangible amortization expense of approximately $0.2 billion and a charge for after-tax special items of approximately $0.1 billion. Second quarter 2014 net earnings included after-tax intangible amortization expense of approximately $0.4 billion and a charge for after-tax special items of approximately $0.4 billion. A reconciliation of non-GAAP financial measures is included as an accompanying schedule. Excluding after-tax intangible amortization expense and special items, adjusted net earnings for the current quarter were $4.8 billion and adjusted diluted earnings per share were $1.71, representing decreases of 6.3% and 3.9%, respectively, as compared to the same period in 2014.* On an operational basis, adjusted diluted earnings per share increased 6.7%.* "Our solid sales and earnings results in the quarter reflect the strong underlying growth we're seeing across the enterprise," said Alex Gorsky, Chairman and Chief Executive Officer. "Our diverse portfolio and scale are enabling this performance, and we've continued to invest in building a robust enterprise pipeline that will drive our growth over the long term. Our passion to deliver transformational new medicines and products reflects the ongoing commitment of our dedicated employees to improve health and well-being."
The Company increased its adjusted earnings guidance for full-year 2015 to
$6.10 - $6.20 per share. The Company's guidance excludes the impact of after-tax intangible amortization expense and special items.
Worldwide Consumer sales of
$3.5 billion for the second quarter represented a decrease of 7.0% versus the prior year, consisting of an operational increase of 2.3% and a negative impact from currency of 9.3%. Domestic sales increased 2.7%; international sales decreased 12.2%, which reflected an operational increase of 2.1% and a negative currency impact of 14.3%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 3.1%, domestic sales increased 2.9% and international sales increased 3.2%.*
Positive contributors to Consumer operational results were sales of over-the-counter products including ZYRTEC® allergy medications and TYLENOL® analgesics; international feminine protection products; and LISTERINE® oral care products.
Worldwide Pharmaceutical sales of
$7.9 billion for the second quarter represented a decrease of 6.6% versus the prior year with operational growth of 1.0% and a negative impact from currency of 7.6%. Domestic sales decreased 1.5%; international sales decreased 12.7%, which reflected an operational increase of 3.8% and a negative currency impact of 16.5%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 1.5%, domestic sales decreased 0.6% and international sales increased 3.9%.* Additionally excluding hepatitis C sales, underlying operational growth worldwide was 9.7%.*
Worldwide operational sales growth was driven by new products and the strength of core products. New product sales growth was negatively impacted by lower sales of OLYSIO® (simeprevir) in the U.S and lower sales of SOVRIAD® (simeprevir) in
Japan due to competitive entrants. Strong growth in new products include INVOKANA®/INVOKAMET® (canagliflozin), for the treatment of adults with type 2 diabetes; international sales of OLYSIO® (simeprevir), for combination treatment of chronic hepatitis C in adult patients; IMBRUVICA® (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, or blood cancers; XARELTO® (rivaroxaban), an oral anticoagulant; and ZYTIGA®(abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer.
Additional contributors to operational sales growth were STELARA® (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis and psoriatic arthritis; INVEGA® SUSTENNA®/XEPLION® (paliperidone palmitate), a once-monthly, long-acting, injectable atypical antipsychotic for the treatment of schizophrenia in adults; domestic sales of CONCERTA® (methylphenidate HCI), for the treatment of attention deficit hyperactivity disorder; and SIMPONI®/SIMPONI ARIA® (golimumab), biologics approved for the treatment of a number of immune-mediated inflammatory diseases.
During the quarter, the
U.S. Food and Drug Administration (FDA) granted approval of INVEGA TRINZA™ (paliperidone palmitate), an atypical antipsychotic injection administered four times a year for the treatment of schizophrenia. In July, a rolling submission was completed with the FDAfor the Biologic License Application for daratumumab for the treatment of multiple myeloma. The European Commission approved STELARA®(ustekinumab) for the treatment of adolescents with moderate-to-severe psoriasis, SIMPONI® (golimumab) for treatment of non-radiographic axial spondyloarthritis and IMBRUVICA® (ibrutinib) for the treatment of Waldenström's Macroglobulinemia.
Also in the quarter, an exclusive worldwide license and collaboration arrangement was entered into with Achillion Pharmaceuticals, Inc. to develop and commercialize one or more of Achillion's lead hepatitis C virus assets.
Worldwide Medical Devices sales of
$6.4 billion for the second quarter represented a decrease of 12.2% versus the prior year consisting of an operational decrease of 4.7% and a negative currency impact of 7.5%. Domestic sales decreased 5.8%; international sales decreased 17.3%, which reflected an operational decrease of 3.9% and a negative currency impact of 13.4%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 1.4%, domestic sales increased 1.6% and international sales increased 1.4%.*
Primary contributors to operational growth were sales of endocutters in the Surgical Care business; electrophysiology products in the Cardiovascular Care business; joint reconstruction products in the Orthopaedics business; international sales of contact lenses in the Vision Care business; and sales of biosurgicals and energy products in the Specialty Surgery business.
During the quarter, the Company announced the acceptance of the
March 1, 2015 binding offer from Cardinal Health to acquire its Cordis business for an approximate value of $2 billion.
Johnson & Johnson
Caring for the world, one person at a time, inspires and unites the people of
Johnson & Johnson. We embrace research and science - bringing innovative ideas, products and services to advance the health and well-being of people. Our approximately 127,300 employees at more than 265 Johnson & Johnson operating companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.
* Operational sales growth excluding the net impact of acquisitions, divestitures and hepatitis C sales, as well as adjusted net earnings, adjusted diluted earnings per share and operational adjusted diluted earnings per share excluding after-tax intangible amortization expense and special items, are non-GAAP financial measures and should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company's website atwww.investor.jnj.com.
Copies of the financial schedules accompanying this press release are available at www.investor.jnj.com/historical-sales.cfm. These schedules include supplementary sales data, a condensed consolidated statement of earnings, reconciliations of non-GAAP financial measures, and sales of key products/franchises. Additional information on
Johnson & Johnson, including a pharmaceutical pipeline of selected compounds in late stage development and a copy of today's earnings call presentation can be found on the Company's website at www.investor.jnj.com.
NOTE TO INVESTORS
This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position and business strategy. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of
Johnson & Johnson. Risks and uncertainties include, but are not limited to, economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges and uncertainties inherent in new product development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; the ability of the company to successfully execute strategic plans; impact of business combinations and divestitures; challenges to patents; the impact of patent expirations; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws and regulations, including global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns or financial distress of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and description of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 28, 2014, including Exhibit 99 thereto, and the company's subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.investor.jnj.com, or on request from Johnson & Johnson. Any forward-looking statement made in this release speaks only as of the date of this release. Johnson & Johnson does not undertake to update any forward-looking statements as a result of new information or future events or developments.