Johnson & Johnson 3Q profit rises, tops views

Higher sales of consumer products and medical devices, boosted overseas by the weak dollar, also helped the New Brunswick, N.J.-based maker of contraceptives, baby care items, medical devices and prescription drugs. It reported net income of $3.31 billion, or $1.17 per share, up from $2.55 billion, or 88 cents per share, in the year-ago period.

Revenue climbed 6.3 percent, to $15.9 billion from $14.97 billion, but was boosted 3.1 percent by favorable currency exchange rates.

Analysts surveyed by Thomson Reuters expected earnings per share of $1.11 and revenue of $15.69 billion.

Prescription drug sales were flat at $6.1 billion and would have been down 2.5 percent if not for favorable exchange rates. They were hurt by generic competition for pain patch Duragesic and the pill version of Risperdal, whose sales were down 63 percent. The long-acting injected version of the schizophrenia drug, Risperdal Consta, still has patent protection and its sales increased 10 percent to $338 million.

Three other drug franchises out of the 11 J&J reports saw sales decline: antibiotic Levaquin, heartburn treatment Aciphex and anemia drug Procrit. Epilepsy drug Topamax, Remicade for arthritis and other immune disorders, attention deficit disorder pill Concerta and cancer drug Velcade all saw double-digit sales increases.

"Now's a very difficult time for J&J," although it has robust cash flow, said Krensavage Partners money manager Mike Krensavage, who owns J&J shares. "It's facing some significant headwinds" from looming generic competition, he said, but could resume growth of drugs in spring of 2010.

Company executives attempted to reassure investors with a detailed update on J&J's drug pipeline, saying it is the most robust in company history and that J&J is on track to seek approval for seven to 10 new drugs from 2008 through 2010.

"I don't see any blockbusters" in the pipeline, said analyst Steve Brozak of WBB Securities.

"The pharmaceuticals sales are the leading indicator that we are in a full-blown recession," and other drugmakers are likely to have similarly disappointing results for prescription drugs, he said. "Thank God for their consumer business."