By Patrick Thomas and Peter Loftus 

Johnson & Johnson raised its financial forecast for the rest of 2019, despite grappling with a heavy case load of litigation, as it reported quarterly results that were above Wall Street estimates, boosted by gains in its consumer and pharmaceuticals divisions.

J&J is facing lawsuits in the U.S. from more than 100,000 plaintiffs over product safety and marketing practices for a range of products including baby powder and opioids. The company, which says its products are safe, has lost some high-profile trials, including an $8 billion award of punitive damages last week over the safety of its antipsychotic Risperdal.

The lawsuits and costly verdicts have hurt J&J's share price and reputation, while raising expectations that its ultimate tab to resolve all of the lawsuits could be hefty.

While reporting the quarter's results Tuesday, J&J executives said business is strong, and they were confident they could manage the litigation. "We know how to navigate these matters and we're going to stay focused on the task at hand," Chief Financial Officer Joseph Wolk told analysts on a conference call.

Mr. Wolk said he was confident the large Risperdal award wouldn't stand and noted J&J has won trials, including last week when juries sided with J&J in cases alleging use of its baby powder caused cancer.

On Tuesday, a Missouri state appeals court reversed a $110 million jury award in 2017 to a Virginia woman who claimed her use of J&J's talcum powder caused ovarian cancer. The appeals court cited lack of jurisdiction. Attorneys for the woman plan to appeal the ruling.

He also said the company was open to settling lawsuits by state and local governments alleging J&J contributed to the opioid-addiction crisis. J&J recently settled with two Ohio counties, though Mr. Wolk said J&J was unable to find a "reasonable settlement approach" in Oklahoma, where a judge ordered the company to pay $572 million to the state after a trial.

J&J shares rose 1.6% on the New York Stock Exchange Tuesday as investors cheered the company's better-than-expected quarterly performance.

The New Brunswick, N.J., health-products company reported a profit of $4.83 billion, or $1.81 a share, compared with $3.93 billion, or $1.44 a share, a year ago.

Excluding special items, J&J earned $2.12 a share. Analysts surveyed by FactSet were expecting earnings of $1.79 a share, or $2.01 a share on an adjusted basis.

World-wide sales rose to $20.73 billion from $20.35 billion a year earlier. Analysts had expected $20.08 billion of revenue in the quarter.

Sales in its pharmaceuticals division grew by about 5% to $10.88 billion. Sales of Stelara, a treatment for Crohn's disease and psoriasis, rose 30% to $1.7 billion, helping to offset an 18% decline in sales of arthritis drug Remicade caused by competition from lower-priced copies.

Sales in its medical-devices business fell 3% to $6.38 billion, but analysts said the result was better than expected. Sales of consumer products, which include products such as Band-Aid bandages and Tylenol medicine, increased nearly 2% to $3.47 billion. Sales of baby-care products, which include the company's signature baby powder and shampoo, declined nearly 12% to $417 million.

The company now expects reported sales for the year to be between $81.8 billion and $82.3 billion, up from its previous outlook of $80.8 billion to $81.6 billion.

J&J raised its adjusted per-share earnings guidance to between $8.62 and $8.67 from between $8.53 and $8.63.

Write to Patrick Thomas at Patrick.Thomas@wsj.com and Peter Loftus at peter.loftus@wsj.com

 

(END) Dow Jones Newswires

October 15, 2019 18:10 ET (22:10 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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