REUTERS: Johnson & Johnson boosted its profit forecast for the year on Tuesday after posting better-than-expected quarterly earnings on stronger prescription sales of its psoriasis treatment Stelara and cancer drug Imbruvica.
Shares of the company, which makes products ranging from prescription drugs to consumer goods such as Band-Aids, rose 2per cent to US$133.48 in premarket trading.
J&J shares have been under pressure this year, widely underperforming the S&P healthcare sector , as the company faces more than 13,000 lawsuits tied to antipsychotic drug Risperdal as well as a range of lawsuits involving its baby powder, opioids, medical devices and other products.
J&J did not report litigation expenses for the third quarter and its legal costs over the nine-month period remained at US$832 million, as was reported at the end of the second quarter.
JP Morgan analyst Chris Schott said litigation risk remains a clear overhang on the shares, but added that the results will likely be well received and continue to believe that analysts' estimates remain too low.
J&J's pharmaceuticals business has in recent years cushioned the impact of relatively slow growth in its other medical device and consumer units even as some of the company's older drugs face competition from cheaper versions.
Much of the growth has come from newer treatments such as Stelara, which reported a near 30per cent growth in sales to about US$1.7 billion. Sales from cancer treatment Imbruvica rose about 31per cent to US$921 million in the quarter.
The company on Tuesday said it now expects full-year adjusted earnings per share in the range US$8.62 to US$8.67, from its prior forecast of US$8.53 to US$8.63. Analysts were expecting US$8.60 per share.
Net earnings rose to US$4.83 billion, or US$1.81 per share, in the quarter, from US$3.93 billion, or US$1.44 per share, a year earlier.
Excluding items, the company earned US$2.12 per share, beating analysts' expectations of US$2.01 per share, according to IBES data from Refinitiv.
Total sales rose 1.9per cent to US$20.73 billion, above the average analysts' estimate of US$20.07 billion.
Pharmaceutical unit sales rose 5.1per cent to US$10.88 billion, above analysts estimates of US$10.28 billion, according to a Refinitiv poll of three analysts.
(Reporting by Saumya Sibi Joseph and Ankur Banerjee in Bengaluru; Editing by Bernard Orr)