CORRECTED – UPDATE 3-J&J results top views, but forecast weighs

(In paragraph 7, deletes “operating” from first reference to
sales growth)

* Q4 EPS ex-items $1.02 vs 97-cent estimate

* Sees 2010 EPS $4.85-$4.95

* Shares fall 1.3 percent
(Adds analyst, CEO quotes, updates shares)

By Ransdell Pierson and Lewis Krauskopf

NEW YORK, Jan 26 (BestGrowthStock) – Johnson & Johnson (JNJ.N: )
reported better-than-expected quarterly sales and earnings,
helped by sharply lower taxes and a return to solid growth for
its array of medicines, medical devices and consumer products.

But the diversified healthcare company, which is
traditionally conservative in its outlook, provided a 2010
profit forecast range that barely reached Wall Street
projections. Its shares fell 1.3 percent.

J&J on Tuesday said its fourth-quarter profit (Read more your timing to make a profit.) fell to $2.2
billion, or 79 cents per share, compared with $2.71 billion, or
97 cents per share, in the year-ago period.

Excluding special items, including an $852 million
restructuring charge, J&J earned $1.02 per share. Analysts on
average had expected 97 cents per share, according to Thomson
Reuters I/B/E/S.

Company sales rose 9 percent to $16.55 billion, well above
analyst predictions of $15.7 billion, helped by a recovering
economy and newer products. By contrast, third-quarter sales
fell 5.3 percent, hurt by generic competition for the company’s
Risperdal schizophrenia drug.

“Sales beat our expectations across all three divisions,”
Leerink Swann analyst Rick Wise said in a research note, with
fourth-quarter growth more than double his projections.

Company Chief Executive William Weldon said 2009 was the
first year in 76 years that J&J failed to report sales growth.
But he predicted a return to operating sales growth this
quarter, meaning growth independent of foreign exchange

“We already are seeing promising signs we are driving
significant growth and capitalizing on the investments we’ve
made,” Weldon told analysts in a conference call.

Another diversified health company, Swiss-based Novartis AG
(NOVN.VX: ), reported a 54 percent rise in fourth-quarter net
profit helped by sales of its H1N1 swine flu vaccines, and
named drugs head Joe Jimenez as CEO, replacing longtime chief
Daniel Vasella. [ID:nLDE60P0RD]

J&J’s fourth-quarter pharmaceutical division sales rose 5.4
percent to $5.99 billion, medical device and diagnostic unit
sales increased 11.8 percent to $6.31 billion and consumer
product sales rose 10.2 percent to $4.25 billion.

The earnings beat in the quarter was due in part to an
extra week of sales in the calendar year, as well as sharply
lower taxes, the company said. The tax rate in the quarter, of
15.3 percent, was well below the 22.8 percent rate in the
year-ago period.

J&J, which is known for making conservative forecasts,
predicted a full-year 2010 profit of $4.85 per share to $4.95
per share excluding items. Analysts have expected $4.94 per

J&J’s profit jumped almost 10 percent in 2008, but grew
only 1.8 percent last year as the recession crimped sales of
many products and generic competition took its toll.

The company expects earnings to rise as much as 7 percent
this year — helped by novel products such as its recently
approved Stelara psoriasis drug.

J&J shares fell 81 cents to $62.41 in morning trading on
the New York Stock Exchange.

Stock Market Trading
(Reporting by Ransdell Pierson and Lewis Krauskopf, editing by
Gerald E. McCormick, Dave Zimmerman)

CORRECTED – UPDATE 3-J&J results top views, but forecast weighs