Johnson & Johnson
Dive deeper into that $0.10 raise and we see that $0.08 of it was due to currency changes. Johnson & Johnson is benefiting from a weaker dollar, which increases sales in foreign currencies when they're translated back into U.S. dollar. Eli Lilly
That still leaves $0.02 of operational gain, but the company will get about $0.05 from its settlement with Merck
The culprit? Recalls, of course. While the Food and Drug Administration consent decree didn't come with any up-front fines, the third-party overlord checking the consumer health-care products will slow down shipments and cause additional costs to the tune of $0.06 per share.
What if none of these things had happened? Subtract out the benefits and add back the negative items: $0.10-$0.08-$0.05+$0.06 and it appears Johnson & Johnson thinks it'll be about $0.03 per share better off this year than it did three months ago.
That's less than a 1% increase over the previous guidance. Better than nothing, but I don't think Johnson & Johnson and its investors are out of the woods just yet. The company needs to get its manufacturing on target and then earn back consumer health-care customers that it has lost to Bayer, Merck, Pfizer
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Johnson & Johnson and Pfizer are Motley Fool Inside Value recommendations. Johnson & Johnson is a Motley Fool Income Investor choice. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. The Fool owns shares of Johnson & Johnson. Alpha Newsletter Account, LLC owns shares of Johnson & Johnson. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.