On the surface it seems ludicrous. Yesterday Johnson & Johnson
If you dig a little deeper into the earnings statement, the reason becomes clear -- most of that growth came from the weak dollar pushing year-over-year overseas growth into the double-digit percentages. Excluding currency effects, sales were up just 2.6% year over year in the first quarter. Not horrible, especially in this environment, but no reason for the stock to soar, either.
Consumer sales -- over-the-counter drugs and other products like lotions and mouthwash -- had a pretty decent quarter, growing almost 10% year over year, excluding currency effects. Getting to sell Pfizer's
Sales of drugs that require a prescription, on the other hand, weren't looking so hot. A 37% increase in sales of anti-inflammatory Remicade -- thanks in large part to international marketing partner Schering-Plough's
Medical devices landed somewhere in the middle, sporting a 1.4% year-over-year increase in sales excluding currency effects. Sales of drug-eluting stents were down, as J&J doubled its U.S. competition when Medtronic's
While it's appropriate to discount J&J's currency movements when trying to figure out how fast the company is growing, the fact remains that the company really did bring all that additional cash into its coffers. Given its track record of making good strategic acquisitions, I expect it'll take the cash and grow it wisely before investors want it back (when the dollar moves in the other direction).