Johnson & Johnson Tumbles in Net Income Losses
by Maejoy Tutor in Business on Aug 03, 2011
The number two biggest maker of healthcare products in the world, Johnson & Johnson has reported a drop in their profits as a recall of Motrin, Tylenol and other consumer brands and generic competitors cut down sales in the second quarter.
J&J which is based in New Jersey reported a net income of $1 per share or $3.78 billion for the second quarter, a decline from $1.23 per share or $3.45 billion last year.
Additionally, the company also has lost its ground against its competitors of painkillers that are over-the-counter and other products, following problems over quality products, forcing it to pull out about forty brands of Motrin, Tylenol and other meds in the previous year. Patents failed in the quarter for Concerta and Levaquin, which allowed the drugs’ generic competition produce sales amounting to $2.7 billion last year.
An analyst at JPMorgan Chase & Co. in New York, Michael Weinstein noted that the recalls became a pull especially on the consumer business. He further emphasized that the store brands and the economy will be continuing to consider on this segment. He says that consumers carry on in trading down to brands with lower prices.
The shares have increased 8.5% this year, however, in the composite trading of New York Stock Exchange yesterday, J&J dropped 36 cents to $67.09.
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