J&J beats forecasts as new drugs shine, shares jump

By Ransdell Pierson (Reuters) - Johnson & Johnson reported quarterly earnings well above expectations, as strong sales of new drugs offset weak demand for consumer products and medical devices, and the company slightly raised its full-year profit view. Shares were up 2.5 percent in premarket trading. J&J on Tuesday said it earned $4.73 billion (2.82 billion pounds), or $1.64 per share, in the first quarter. That compared with $3.5 billion, or $1.22 per share, in the year-ago quarter, when the diversified healthcare company took a big litigation charge. "Strong pharmaceuticals results showcased a very strong 2014 start for J&J," said Morningstar analyst Damien Conover, referring to sales growth of almost 11 percent for prescription medicines in the quarter. He cited especially strong sales of immunology medicines and for the company's recently approved Olysio treatment for hepatitis C. The hepatitis drug, known as Sovriad in many countries outside the United States, was approved by U.S. regulators in November and captured global sales of $354 million in the first quarter - putting it on track to become a blockbuster product later this year. The company handily beat earnings forecasts because newer drugs have very high profit margins, Conover said. "They amplified the affect on the company's bottom line." But J&J's other business units failed to impress. Sales of medical devices and diagnostics were flat at $7.06 billion, hurt by lower prices associated with competitive bidding in the U.S. Medicare insurance program for the elderly and disabled. Global sales of consumer products fell 3.2 percent to $3.56 billion, as many over-the-counter medicines remain unavailable due to earlier product recalls in the United States. J&J says it now expects full-year earnings of $5.80 to $5.90 per share, up from its prior forecast of $5.75 to $5.85 per share given in January. Excluding special items, J&J earned $1.54 per share. Analysts, on average, were expecting $1.48 per share, according to Thomson Reuters I/B/E/S. Sales rose 3.5 percent to $18.1 billion in the quarter, topping Wall Street forecasts of $18 billion. Global sales of prescription drugs jumped to $7.5 billion. Sales of Simponi, a drug for rheumatoid arthritis, rose 9.3 percent to $259 million, while sales of psoriasis treatment Stelara soared 32 percent to $456 million. J&J shares were trading at $99.50 in premarket trading, from their closing price on Monday of $97.14 on the New York Stock Exchange. (Corrects $456 billion to $456 million in penultimate paragraph) (Reporting by Ransdell Pierson, Editing by Franklin Paul and Sofina Mirza-Reid)