J&J misses sales estimates; lifts forecast to reflect Actelion buy

Johnson Johnson reported on Tuesday quarterly revenue that missed estimates due to slowing pharmaceutical sales, but the company, which is in the process of closing its $30 billion acquisition of Actelion, raised its 2017 forecast.

Pharmaceutical sales were hurt mainly by lower-than-expected demand for its blood thinner Xarelto, cancer drug Zytiga, and autoimmune treatments Simponi and Stelara.

Sales in the segment rose 0.8 percent to $8.25 billion, below Barclays estimate of $8.47 billion.

The Band-Aid maker got off to a rocky start this year, forecasting in January sales and profit for 2017 below Street estimates, and said it expected a slower growth rate for pharmaceuticals in the year.

A week later, however, it announced it had beat out France’s Sanofi SA, clinching the deal to buy Swiss biotech firm Actelion. JJ in February agreed to sell its Codman neurosurgery business for more than $1 billion.

On Tuesday, the company raised its 2017 forecast to reflect the Actelion acquisition, which is expected to close in the second quarter.

JJ raised its sales expectations to $75.40 billion-$76.10 billion and adjusted profit to $7.00-$7.15 per share.

In January, the company forecast revenue of $74.10 billion-$74.80 billion and adjusted earnings of $6.93-$7.08 per share.

JJ is the first of the major pharmaceutical companies to report quarterly results, a month after the Republican attempt to overhaul the U.S. healthcare system spectacularly failed, although a renewed effort is said to be in the works.

The diversified healthcare company said sales rose to $17.77 billion in the first quarter from $17.48 billion a year earlier, but came in below analysts’ average estimate of $18.04 billion, according to Thomson Reuters I/B/E/S.

Net earnings in the first quarter were $4.42 billion, or $1.61 per share, compared with $4.46 billion, or $1.59 per share, in the year-earlier period.

Excluding items, JJ earned $1.83 per share, beating Street expectations of $1.77, helped by lower operating expenses and taxes.

The company’s shares slipped 1.2 percent to $124.10 in trading before the bell on Tuesday.

(Reporting by Natalie Grover in Bengaluru; Editing by Martina D’Couto)