July 17 (Bloomberg) -- Johnson & Johnson, the world’s biggest maker of health-care products, lowered its 2012 profit forecast on unfavorable foreign-exchange rates.
Second-quarter net income fell 49 percent to $1.4 billion, or 50 cents a share, on acquisition costs, the New Brunswick, New Jersey-based company said today in a statement. The drugmaker cut its forecast to $5 to $5.07 a share, excluding one-time items, from $5.07 to $5.17.
Revenue fell 0.7 percent in the quarter to $16.5 billion, reflecting a negative impact from currency of 4.2 percent, J&J said. Other U.S. companies, including Procter & Gamble Co. and Philip Morris International Inc. last month cut their 2012 forecasts because currency effects were hurting sales in international markets.
“It’s all because of currency,” said Tony Butler, an analyst with Barclays Capital Inc. “I don’t care about currency. I’m looking at what they do as a business. They can’t pick up a facility and move it to a different jurisdiction or sell in a different jurisdiction.”
J&J gained less than 1 percent to $69 at the close in New York. The shares had gained 2.3 percent in the past 12 months.
Profit excluding some items beat by 1 cent the $1.29 a share average of 21 analyst estimates compiled by Bloomberg. While U.S. sales declined 1.2 percent in the quarter, J&J gets about 26 percent of its revenue from Europe.
Looking at the business outside the effect of foreign exchange rates, “J&J is on the mend,” Butler said.
Chief Executive Officer Alex Gorsky, who took over in April, has been working to boost revenue hurt by recalls of at least 50 products over two years. Generic competition to some of its top-selling drugs has also cut into sales. Analysts said they had been looking for Gorsky to move the company past those issues and start growing sales in the second half of the year.
Second-quarter sales of J&J’s attention deficit disorder drug Concerta fell 23 percent to $268 million from a year earlier. Revenue from the antibiotic Levaquin fell 90 percent to $16 million from $159 million. Both drugs lost patent protection in the U.S. last year.
Helping ease those losses was revenue from J&J’s top seller, the rheumatoid arthritis treatment Remicade, which rose 13 percent to $1.5 billion.
J&J said its acquisition of Synthes Inc., which won U.S. regulatory approval in June, added 1.2 percent to operational sales. Synthes makes tools and implants to treat damaged bones.
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