Johnson & Johnson reports 6.3% drop in profits for 3d quarter

The closed McNeil Consumer Healthcare facility in Fort Washington. It is not known when the facility will reopen.
The closed McNeil Consumer Healthcare facility in Fort Washington. It is not known when the facility will reopen.
Posted: October 19, 2011

Johnson & Johnson, blaming some of its problems on the closed McNeil Consumer Healthcare facility in Fort Washington, reported a 6.3 percent drop in profits for the third quarter compared with the same period in 2010.

Company officials said in a news release and a conference call with Wall Street analysts that domestic sales and revenue were again hurt in part by the extra costs and lack of income from over-the-counter medicines that had been produced at the plant in Fort Washington. Reporters were not allowed to ask questions in the conference call.

"Sales in U.S. over-the-counter medicines were significantly impacted by the suspension of manufacturing at the McNeil Consumer Healthcare facility in Fort Washington, Pa., as well as the impact on production volumes related to ongoing efforts to enhance quality and manufacturing systems," the company said in a statement.

Manufacturing of products such as Tylenol cold medicines was halted at the Fort Washington plant in April 2010 because of problems found by inspectors from the Food and Drug Administration. It is not known when the facility will reopen.

The company said net earnings and diluted earnings per share for the third quarter of 2011 were $3.2 billion and $1.15, respectively. Third-quarter 2011 net earnings also included an after-tax mark-to-market adjustment to the value of the currency option associated with the planned acquisition of Synthes Inc.

Excluding special items, net earnings for the current quarter were $3.4 billion and diluted earnings per share were $1.24.

Synthes is the Swiss-based medical-device manufacturer with a U.S. headquarters in West Chester. J&J agreed to buy Synthes in April for $21.3 billion. J&J's chief financial officer, Dominic J. Caruso, said the company still hoped to close the Synthes acquisition in the first half of 2012. Caruso said J&J was exploring ways to use some of its cash to finance the Synthes deal.


Contact staff writer David Sell

at dsell@phillynews.com or 215-854-4506.

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