Health care giant Johnson & Johnson's first-quarter revenue jumped 12.6 percent as sales rose across its three business segments, but much-higher spending and one-time charges trimmed its net income by 1.2 percent. The results still beat Wall Street expectations.
The maker of baby products, medical devices and blockbuster immune disorder drug Remicade on Tuesday reported revenue of $20.01 billion, topping analyst projections for $19.48 billion, according to a poll by Zacks Investment Research.
The New Brunswick, New Jersey, company reported net income of $4.37 billion, or $1.60 per share, down from $4.42 billion, or $1.81 per share, in 2017's first quarter.
Excluding $1 billion in writedowns on the value of assets and $300 million in other one-time charges, adjusted income came to $5.54 billion, or $2.06, a nickel better than expected.
"Our pharmaceutical business continues to deliver robust growth and we are pleased with the improvement in our consumer business," Johnson & Johnson Chairman & Chief Executive Officer Alex Gorsky said in a statement.
"The U.S. tax legislation passed late last year is creating the opportunity for us to invest more than $30 billion in R&D and capital investments in the U.S. over the next four years," an increase of 15 percent, Gorsky added.
In the first quarter, J&J increased spending on research and development by 16 percent, while spending on production jumped 22 percent and spending on marketing and administration rose nearly 11 percent.
Marketing and production costs were higher partly because of the launch of its new severe psoriasis drug, Tremfya, approved last summer. The company also had another medicine, Erleada for prostate cancer, approved on Feb. 14.
The world's biggest maker of health care products reported that overseas sales jumped 20 percent, buoyed by favorable currency exchange rates.
"They did just okay on an operating basis when you strip out growth bought via acquisitions," said Erik Gordon, a professor and pharmaceuticals analyst at University of Michigan's Ross School of Business, adding, "The good news is that some of their newer products with patent life left in them are selling well."
Johnson & Johnson forecast full-year earnings in the range of $8 to $8.20 per share, with revenue in the range of $81 billion to $81.8 billion.
In premarket trading, shares rose $1.16, or 0.9 percent, to $133.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.
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