J&J Third-Quarter Sales Decline on Recall of Children’s Drugs
October 19, 2010 - As recalls of their children’s medicines continue to hurt profits, Johnson & Johnson reported third quarter revenue that missed analysts' estimates. According to a statement by the company, sales from the McNeil consumer products unit fell 11 percent because of the recalls.
In April, J&J withdrew more than 40 types of children’s drugs from shelves because of quality and potency that didn’t meet internal standards. The recalls and suspension of manufacturing at the facility that made some of those medicines will reduce sales this year by about $600 million, the company said in July.
“Weak U.S. consumer sales -- which came in $209 million below our estimates -- could potentially signal some systemic damage to J&J’s brand name in light of the recent McNeil recalls and negative publicity,” said Rick Wise, an analyst at Leerink Swann, in a note to clients today.
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