This has been rough stretch for one of the bluest of the blue chip stocks – health care giant Johnson & Johnson (JNJ). A generally rotten U.S. healthcare market has certainly hampered results, but management has fired a few rounds into its own feet with extreme product quality issues in the consumer care business (leading to numerous recalls) and unimpressive capital allocation and R&D decisions in the device business. All of that said, though, today's poor performance may be prologue to a better day for patient investors.
Low-Quality Third Quarter
There were only a very few bright spots in this quarter, though reported results did not deviate much from analyst forecasts. Revenue looked alright at 7%, but organic constant currency growth was under 3%, and JNJ has become dependent on foreign markets for its growth (international growth clocked in at over 8% this quarter).
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Bad Management Ails Johnson & Johnson; New Drugs May Offer A Boost
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