Sunday, April 24, 2011
Johnson and Johnson excerpts form Quarterly earnings call:
DePuy franchise had operational growth of 1.7% when compared to the same period in 2010, with the U.S. down 0.4% and the business outside the U.S. growing by 4.2% operationally…….
(Depuy CfO) In recent weeks, we also announced several developments that I would like to comment on. In March, our McNeil Consumer Healthcare business finalized the terms of Consent Decree with the U.S. Food and Drug Administration for three manufacturing facilities. We have previously included in our guidance for 2011, an impact of approximately $0.06 per share from the ongoing remediation efforts of McNeil.
Now that we have finalized the terms of the Consent Decree, we estimate that that impact will be twice that amount. These results from both the slowdown in sales reflecting the impact on production volumes, as we implement the additional quality steps outlined in the Decree as well as additional investments required in the remediation process.
In April, we announced the settlement with the U.S. Department of Justice, the U.S. Securities and Exchange Commission and the U.K. (Securities) Fraud Office for matters related to Foreign Corrupt Practices Act, investigations and the United Nation's Oil for Food Program. We will pay nearly $80 million in connections with these matters and amount that was previously reserved for.
Details on these matters have been widely reported and we've accepted full responsibility for the short comings in our McNeil Consumer manufacturing operations and for the actions related to these other investigations. We are confident that these matters are not representative of the vast majority of the Johnson & Johnson employees around the world………
Michael Weinstein - JPMorgan: I'll actually pick up (where Rick left off) and just talk for just a minute about DePuy. Louise, if I heard you right, and so first correct me if I didn't, I think you said that U.S. hips and knees were both down 6% year-over-year. Is that right?
Louise Mehrotra - VP, IR: In the U.S., yes. On an operational basis, yes.
Michael Weinstein - JPMorgan: Then just to recognize, the comparison is still tough in the first quarter but that's probably, I think at least certainly on the knee side below (the street's) expectations. So any commentary you have about the environment for DePuy would be appreciated. If you could also maybe just compare that to the performances you saw in your other surgical businesses for Ethicon, Ethicon Endo?
Louise Mehrotra - VP, IR: Mike, on a sequential basis in the U.S., the hips are actually up 4% and the knees are up 1%. So, the knee market is still soft in the U.S., but on a sequential basis you are seeing it in a positive trend rate…..
[comment from connie: so bottom line the hip business is down at Depuy on YoY basis (year over year) however, on a sequential basis in the US (progress since last quarter) hip sales are up...kind of interesting isn;t it? Typically, CFOs don't comment on results in LOB (lines of business), I surely wonder where the increase in sales comes from in the hip business. I recall my surgeon wanted to replace my problem depuy MOM implant with an alternate material from depuy.]
Posted by Connie at 7:21 AM