(Reuters) - Johnson & Johnson (JNJ.N) reported third-quarter sales well below Wall Street estimates, hurt by the stronger dollar and disappointing demand for its Remicade arthritis drug and its Xarelto blood clot preventer.
J&J shares fell 0.7 percent, even though the company also said on Tuesday it planned to buy back up to $10 billion worth of its common stock.. The repurchases, to be financed with debt and to have no time limit, would remove about 3.8 percent of the company’s outstanding shares.
The company had already bought back $5 billion of shares in a program it announced in July last year.
Global company revenue fell 7.4 percent to $17.1 billion in the quarter. Analysts, on average, expected $17.45 billion. Revenue would have risen 0.8 percent if not for the stronger dollar, which hurts the value of sales outside the United States - where J&J receives nearly half its revenue.
Jefferies analyst Jeffrey Holford said revenue for each of the company’s three divisions, including its largest segment of prescription drugs, were about 2 percent below forecasts.
“The news of a $10 billion share repurchase program is welcome, but it doesn’t address the underlying issues in pharmaceuticals,” Holford said, and may lessen the likelihood of J&J making big acquisitions in the company’s biggest segment.
J&J’s net profit fell to $3.36 billion, or $1.20 per share, from $4.75 billion, or $1.66 per share, a year earlier.
Excluding special items, the company said it earned $1.49 per share, topping Wall Street expectations of $1.45 per share.
Wells Fargo analyst Lawrence Biegelsen said the company was able to top earnings forecasts largely due to an unexpectedly low tax rate.
J&J said it now expects full-year earnings, excluding special items, of $6.15 to $6.20 per share. It had previously forecast $6.10 to $6.20 per share.
Reporting by Ransdell Pierson; Additional reporting by Vidya L. Nathan in Bengaluru Editing by W Simon