Pfizer, J&J; Profits Surpass Forecasts
Pfizer Inc. and Johnson & Johnson on Tuesday reported better-than-expected first-quarter profits on robust sales of drugs to treat high blood pressure, schizophrenia and other chronic conditions.
Pfizer said its profit jumped 33% to $1.09 billion, or 28 cents a share, on higher sales of drugs such as the anti-impotence pill Viagra and Norvasc, the world’s No. 1 blood-pressure drug. That beat the 25-cent average estimate of analysts polled by First Call/Thomson Financial. Revenue rose 10% to $4.3 billion.
“Pfizer had another great quarter and we think that the drug industry will report excellent results throughout the year, driven primarily by strong unit growth--not price increases,” Len Yaffe, analyst with Banc of America Securities, told Reuters.
Pfizer has shed most of its other businesses to focus on drugs. That helped Pfizer win accords to market other companies’ blockbuster drugs, such as Warner-Lambert Co.’s cholesterol reducer Lipitor, which contributed to Pfizer’s profit.
Johnson & Johnson’s earnings grew by 15% to $1.31 billion, or 93 cents a share, 2 cents better than forecasts, on rising sales of drugs such as the anemia treatment Procrit and Risperdal for schizophrenia.
The health-care giant has been relying more on its drug unit to boost profit, although it also makes products ranging from surgical equipment to lipstick.
Drug sales rose 18% at Johnson & Johnson, while sales from the medical-device business grew 3.7% and sales of consumer products, which include the Neutrogena skin-care line, rose by 1.4%.
The results left industry executives and analysts upbeat about the industry’s prospects for the year, brushing aside, for the moment, concerns that some states may attempt to enact drug price caps.
“The demand for pharmaceuticals keeps on increasing because they are very cost-effective,” said Marvin Roffman, president of Roffman Miller Associates Inc., which holds shares of drug companies. “It’s a lot cheaper to take a drug to solve a problem than to send someone to the hospital.”
Drug makers’ shares have performed well this month as investors turned to companies known for consistent profit growth. The AMEX Pharmaceutical Index has risen 7.8% in April as the Dow Jones industrial average has fallen 1.4%.
Shares of J&J; rose $4 to close at $81.50, while Pfizer rose $1.56 to close at $39.56, both on the New York Stock Exchange.
*
Bloomberg News was used in compiling this report.
