(Reuters) – Johnson & Johnson reported a higher-than-expected quarterly profit and raised its full-year forecast as the company gained from strong sales of its new cancer drugs.
Shares of J&J, part of the Dow Jones Industrial Average, were up 1.3 percent in premarket trading on Tuesday.
Higher demand for its blood cancer drugs, Darzalex and Imbruvica, and the addition of high-margin treatments for rare diseases from its $30 billion acquisition of Actelion are expected to boost the company’s earnings in the coming quarters.
The company’s pharmaceutical business posted a 15.4 percent rise in sales in the third quarter.
“We are convinced that the pharma pipeline remains robust and more meaningful contributions will kick in beyond 2017,” Joshua Jennings from Cowen & Co wrote in a client note.
However, sales of J&J’s rheumatoid arthritis drug, Remicade, slipped in the latest quarter as the company faces rising threats from copycat versions of the blockbuster drug.
The company, which makes everything from Band-Aids to Neutrogena beauty products, said its results included the impact of the first full quarter of the acquisition of Actelion, which added 7.9 percent to worldwide operational sales growth.
J&J raised its 2017 profit forecast to a range of $7.25 to $7.30 per share from a range of $7.12 to $7.22 per share estimated previously. Revenue forecast is expected to range between $76.1 billion and $76.5 billion, compared with its earlier outlook of $75.8 billion of $76.1 billion.
Total revenue rose 10.3 percent to $19.65 billion.
However, the company’s net earnings fell to $3.76 billion, or $1.37 per share, in the quarter from $4.27 billion, or $1.53 per share, a year earlier.
Excluding special items, J&J earned $1.90 per share.
Analysts on average were expecting an adjusted profit of $1.80 per share on revenue of $19.28 billion for the latest quarter, according to Thomson Reuters I/B/E/S.
Reporting by Akankshita Mukhopadhyay in Bengaluru; Editing by Anil D’Silva