(By Balaseshan) Johnson & Johnson (NYSE:JNJ) reported a 49.3% drop in second quarter earnings due to intangible asset write-downs, litigation expenses and other costs. In addition, the company lowered its fiscal 2012 earnings guidance below Street's view, sending its shares down 1.24% in premarket.
Earnings plunged 49.3% to $1.41 billion, while earnings per share (EPS) dropped 50% to $0.50. On an adjusted basis, profit was $3.64 billion or $1.30 per share, up from $3.55 billion or $1.28 per share last year.
Sales skid 0.7% to $16.48 billion, which included the impact of the recently completed acquisition of Synthes Inc. that contributed 1.2% to worldwide operational sales growth. The sales declined due to 1.2% downside in domestic sales to $7.36 billion, while international division's sales recording 0.4% downside to $9.12 billion.
Analysts, on average, had expected earnings of $1.29 per share on revenue of $16.69 billion for the second quarter.
Johnson & Johnson's operational results growth of 3.5% was more than offset by unfavorable currency impact of 4.2%. Similarly, international operational growth was 7.1%, but currency had a negative impact of 7.5%.
Global consumer sale slipped 1.9%, while pharmaceutical sales witnessed 0.9% growth with international division contributing 6.8% upside thereby completely offsetting 4.5% weakness in the U.S. Medical Devices & Diagnostics also recorded 0.1 percent downside.
Looking ahead into the full year 2012, the company lowered its adjusted EPS forecast to range of $5.00 to $5.07 from previous estimate of $5.07 to $5.17, while Street analysts predict $5.14. The guidance includes negative exchange rates, but exclude any impact from special items, partially offset by the positive contribution from the Synthes acquisition.
JNJ closed Monday's regular session down 0.23% at $68.45. The stock has been trading between $59.08 and $68.74 for the past 52 weeks.