Johnson & Johnson raises 2016 forecast, shares touch record high
By Natalie Grover and Susan Kelly
(Reuters) - Johnson & Johnson (JNJ.N: Quote) on Tuesday raised its full-year 2016 sales and earnings forecasts and reported quarterly results that beat estimates, helped by strength in its prescription drugs business.
Shares of the diversified healthcare products maker rose 1.6 percent at $125.06 on the New York Stock Exchange after touching a new record high of $125.75.
Analysts said the overall results bode well for J&J shares. "... We expect today's results to drive further upside and, given investor preference for safer names with good dividend yields in the current market environment, we think it bodes well for the stock over the near term,” said Credit Suisse analyst Vamil Divan.
Strong demand for the company's Imbruvica cancer drug and Xarelto blood thinner boosted pharmaceutical sales, which jumped 8.9 percent to $8.7 billion in the quarter. Sales of autoimmune drug Remicade, J&J's biggest product, rose 6.7 percent to $1.78 billion.
The company, which is the first major U.S. drugmaker to announce quarterly earnings, raised its 2016 sales forecast to a range of $71.5 billion to $72.2 billion, from $71.2 billion to $71.9 billion previously.
J&J expects sales to grow at a faster rate than the global healthcare market, which it sees increasing by 3 percent to 5 percent annually over the next five years, Chief Executive Officer Alex Gorsky said on a conference call.
The maker of a variety of products from Tylenol to Band-Aid bandages to Acuvue contact lenses also increased its adjusted profit range to $6.63 to $6.73 per share, from $6.53 to $6.68.
Investors have been concerned about potential competition to Remicade in the United States. U.S regulators earlier this year approved Inflectra, a cheaper version developed by Celltrion Inc (068270.KQ: Quote) and Pfizer Inc (PFE.N: Quote), but a patent battle between J&J and Celltrion has delayed its introduction. Continued...