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Why Johnson & Johnson’s Profits Are on the Rise

Trading On The Floor Of The NYSE As U.S. Stocks Decline Amid Data, Disappointing Retailer ResultsTrading On The Floor Of The NYSE As U.S. Stocks Decline Amid Data, Disappointing Retailer Results
Johnson & Johnson signage is displayed on a monitor on the floor of the New York Stock Exchange (NYSE) in New York, on May 13, 2016. Photograph by Bloomberg via Getty Images

Diversified health care company Johnson & Johnson (JNJ) reported a better-than-expected rise in quarterly sales, helped by strength in its pharmaceuticals business.

The company’s shares were up about 3% at $127 in premarket trading on Tuesday. Up to Monday’s close, they had gained about 20% this year.

J&J, which is the first major U.S. drugmaker to announce quarterly earnings, raised its 2016 sales forecast to a range of $71.5 billion to $72.2 billion from $71.2 billion to $71.9 billion.

Sales of the maker of medical devices, drugs and personal care products rose 3.9% to about $18.5 billion in the second quarter.

Pharmaceutical sales rose 8.9% to $8.6 billion due to increased demand for its Imbruvica cancer drug and Xarelto blood thinner.

Sales of Remicade, J&J’s biggest product, rose 6.7% to $1.78 billion.

However, the company’s net earnings fell to $3.997 billion, or $1.43 per share, from $4.516 billion, or $1.61 per share.

Excluding special items, the band-aid maker earned $1.74 per share.

Analysts on average had expected a profit of $1.68 per share on revenue of $17.98 billion, according to Thomson Reuters I/B/E/S.