Johnson Takes $3 Billion Hit on Hip Recall
Published: January 24, 2012
The company’s DePuy Orthopaedics unit issued an extensive recall of its “metal-on-metal” hip replacement devices in 2010 after they shed metal fragments, causing disabling injuries.
The fourth-quarter charges will allow money to be set aside for patients and lawyers involved in product liability litigation.
“The hip recalls worry me because their eventual costs are unknown,” said Jeff Jonas, an analyst at Gabelli & Company, who noted that the fourth-quarter charges included $800 million for medical costs of the recall.
The company forecast 2012 earnings of $5.05 to $5.15 a share, compared with the consensus Wall Street view of $5.21.
William Price, a company spokesman, said most analysts had not factored in damage from the stronger dollar.
Johnson & Johnson reported better-than-expected fourth-quarter earnings, helped by favorable taxes and sales of new prescription drugs. The company earned $218 million, or 8 cents a share, in the quarter. That compares with $1.9 billion, or 70 cents a share, a year earlier, when it also took charges for recalls of hip replacement devices.
Excluding special charges, Johnson & Johnson earned $1.13 a share. Analysts had expected $1.09, Thomson Reuters said.
Johnson & Johnson, which is based in New Brunswick, N.J., said global sales rose 3.9 percent in the quarter, to $16.26 billion, slightly below analysts’ target.
- Johnson & Johnson takes $3 billion charge in 4Q over litigation, recalls (medcitynews.com)
- Bill Would Require More Monitoring of Implants – NYTimes.com (earlsview.com)
- Will Flawed All-Metal Hip Replacements Cost J&J and Zimmer $5 Billion? – Forbes (earlsview.com)
- Recalled DePuy ASR Hip Implant Lawsuits Filed By The Law Offices Of John David Hart – TheStreet (earlsview.com)
- Johnson & Johnson forecast misses analysts’ mark (sfgate.com)
- Johnson & Johnson Motrin recall: 12m bottles of pain relief medicine withdrawn in US | Mail Online (earlsview.com)
- Johnson & Johnson hit with FDA warning letter | MassDevice – Medical Device Industry News (earlsview.com)
- J&J Reimburses Thousands to Australians in Recall Claims | DePuy Hip Replacement Lawsuit Information Site (earlsview.com)
- Huddersfield patients affected by faulty hip replacements face more surgery – Local West Yorkshire News – News – Huddersfield Examiner (earlsview.com)
- Financial toll soars for hip implant failures – KansasCity.com (earlsview.com)