NEW BRUNSWICK, NJ—Johnson & Johnson posted a much larger fourth-quarter profit this year than they did in 2011, due mainly to higher sales of medical devices and prescription drugs.
The New Brunswick-based company annouced on Tuesday that the their net income was at $2.57 billion, or 91 cents a share more than 2011’s fourth quarter report.
Last year they reported income of just $218 million, or 8 cents a share, according to an Associated Press report on the earnings report.
This year’s profits were healthy despite more than a million dollars in charges that hit the company over the course of the year. As we reported in June, the company took a $600 million charge to settle various civil and criminal lawsuits.
If it weren’t for another $800 million in charges in the latest quarter the company would have posted earnings of $3.38 billion, or $1.19 per share, which is above the expectations accroding to financial analysts.
CEO Alex Gorsky said at a conference that the company is exploring options including the sale or spinoff of its Ortho Clinical Diagnostics business. This equipment is used to detect and diagnose conditions such as HIV, diabetes, and high cholesterol.
Gorsky also said, “Johnson & Johnson delievered solid results in 2012, with momentum continuing to build and sales growth accelerating. As we enter 2013, I believe we’re well positioned to drive growth in this increasily competitive, dynamic market.”
Beyond the optimistic fourth quarter, the company still suffers from long-running manufacturing quality problems that hurt sales.
Since 2009, the company has had 30 recalls of Tylenol and other health products. Among the reasons for the recalls: products with nauseating packaging smells, and others with tiny pieces of glass or metal shards in liquid medicines.
Gorsky said, “We will return a consistent supply of our key products over the course of 2013,” with 75 percent of the brands getting back on the market.
However, Erik Gordon, a professor at the University of Michigan’s Ross School of Business said, “They haven’t turned the corner on the fallout from the string of recalls.”
“Without the sales added by the Synthes acquistion, overall sales were anemic and medical device and diagnostic sales took a dive,” Gordon added.
As of 2012, Johnson & Johson has reported net income of $10.85 billion, or $3.86 per share, on revenue of $67.22 billion. The company expects that the revenue will be $71 billion in 2013.