Johnson & Johnson profit grows 8%, eclipsing analysts’ estimates

Johnson & Johnson’s second-quarter earnings rose 8%, beating analysts’ estimates, as demand for consumer products helped overcome flagging drug sales.

J&J;, the world’s largest maker of healthcare products, also raised its full-year earnings forecast. Revenue grew 8.7% in the quarter to $16.5 billion, helped partly by converting sales outside the U.S. into weaker dollars, the company said Tuesday. Analysts had expected revenue of $16 billion.

Sales of consumer products such as Listerine mouthwash and Zyrtec allergy pills are immune to the sluggish U.S. economy that will otherwise slow J&J;’s sales growth for the rest of the year, Chief Financial Officer Dominic Caruso said.

J&J;’s fundamentals are “not great, but they’re OK,” said Les Funtleyder, an analyst with Miller Tabak & Co. in New York. “And OK looks pretty good” in this market.

Net income rose to $3.33 billion, or $1.17 a share, from $3.08 billion, or $1.05, the year earlier, J&J; reported. Excluding a $40-million charge for an acquisition, profit was $1.18 a share, beating the average $1.13 estimate of analysts surveyed by Bloomberg.

Shares of the New Brunswick, N.J., company rose $1.25, or 1.9%, to $67.66.

Two-thirds of J&J;’s sales growth came from currency exchange. It turned a 1.3% decline for the company’s drug unit, its biggest division, into a 4.4% gain.

More than half of J&J;’s revenue came from overseas, passing U.S. sales for the first time in the company’s 122-year history, a spokesman said.

Rising sales of Zyrtec, baby-care products and better-than-expected revenue for the company’s medical device division offset slumps for the anemia drug Procrit, the antipsychotic Risperdal and the Cypher heart stent.

The company increased its forecast for 2008 earnings to $4.45 to $4.50 a share, from the $4.40 to $4.45 predicted in April.

J&J; expects sales to increase 1% to 2% in 2008. That’s lower than the 2.8% growth in the first six months.