Johnson & Johnson's 2Q profit rises 4.4%
Restrained spending and a sizable one-time gain helped health giant Johnson & Johnson post a 4.4 percent increase in second-quarter profit, despite lower sales in all three business segments and in every region as unfavorable currency exchange rates shaved revenue.
However, the world's biggest maker of health care products managed to beat Wall Street's expectations and raised its 2014 adjusted profit forecast for the second time since January, again by a nickel, to a range of $5.85 to $5.92 per share. That excludes one-time items.
Johnson & Johnson, the maker of Band-Aids, medical devices and biologic drugs, on Tuesday reported net income amounting to $1.61 per share. Adjusted for write-downs and other non-recurring costs, that came to $1.71 per share for a 2-cent beat over the average estimate of 11 analysts surveyed by Zacks Investment Research.
The company posted a one-time gain of $931 million, from the recent divestiture of painkiller Nucynta and other special charges. The divestitures in the quarter included its K-Y lubricants and its Savlon wound-care business.
The New Brunswick, N.J.-based company posted revenue of $17.79 billion in the period, also surpassing Street forecasts for $17.7 billion.
Johnson & Johnson shares fell 49 cents to close Tuesday at $99.78.
-- The Associated Press
$1M gift to fund ASU ag-business chair
Arkansas State will endow a faculty chair in agricultural business with a $1 million gift from the Perry Wilson family. Wilson is the great-grandson of R.E. Lee Wilson of Mississippi County. R.E. Lee Wilson served on the Arkansas State board of trustees from 1917 until his death in 1933, and the school recognizes its top graduate each year with the Wilson Award. Arkansas State is “uniquely situated” to help marry agriculture education and business training, Perry Wilson said in a statement announcing the gift. “It is very, very important to my family that Arkansas State carries on the tradition it has had in educating folks to go into agriculture and into business,” Wilson said. “That’s the real purpose of the endowment; to be a crossover between the agriculture school and the business school.” Agriculture dean Timothy Burcham said the endowed faculty chair will help make Arkansas State a more attractive option for agricultural business faculty and students. Burcham said the school is working to have an ag-business curriculum in place by the fall 2017 semester.
— Chris Bahn
Wells Fargo earnings slip in 2nd quarter
Wells Fargo, a bank known for its ability to increase its profits and beat Wall Street expectations, reported mixed results Tuesday.
The San Francisco-based bank said its second-quarter profit fell to $5.72 billion from $5.73 billion a year earlier.
On an earnings per share basis, the bank's profits rose to $1.03 up from $1.01 a year ago. That was in line with a consensus of analysts' estimates of $1.03 a share, according to Thomson Reuters.
But Wells Fargo's revenue of $21.3 billion came in 1.8 percent lower than the $21.7 billion that analysts had expected.
The bank said it was able to lower expenses from the first quarter, but some of the decline was offset by increases in legal costs and higher salaries and advertising expenses. The bank's efficiency ratio, a key measure of the bank's expenses control measures, rose to 58.5 percent from 57.9 percent a year earlier.
There were other signs that Wells Fargo's profitability was slipping. The bank's return on assets and return on equity both fell in the second quarter from a year ago.
In a statement, Wells Fargo's chief executive and chairman, John Stumpf, said, "Wells Fargo's second-quarter results reflected continued strength in the fundamental drivers of long term growth. Compared with a year ago, we grew loans, deposits and capital, and our balance sheet remained strong."
The shares rose 51 cents to close Tuesday at $57.25.
-- Bloomberg News
ARC air-bag inflators probed after 2 hurt
DETROIT -- U.S. safety regulators are investigating air-bag inflators made by ARC Automotive Inc. that went into about 420,000 older Fiat Chrysler Town and Country minivans and another 70,000 Kia Optima midsize sedans.
The inquiry, revealed in documents posted Tuesday by the National Highway Traffic Safety Administration, comes just weeks after Japanese manufacturer Takata Corp. agreed to recall 33.8 million inflators in the U.S. in the largest automotive recall in American history. At least eight people have been killed worldwide by flying shrapnel from Takata inflators, and more than 100 injured.
The safety agency said it received a complaint in December about a 2009 incident in a 2002 Chrysler minivan but determined it was an isolated case involving an ARC driver's side inflator. Then in June, Kia told the agency about a lawsuit involving a 2004 Optima with an ARC driver's side inflator, so the agency decided to open an investigation. Both cases are the only known incidents involving ARC inflators in vehicles made by either automaker.
"At the present time it is unknown if there is a common root cause in these incidents," safety agency investigators wrote in the documents. "[The agency] is opening this investigation in order to collect all known facts from the involved suppliers and vehicle manufacturers."
The agency said two people were hurt in the occurrences but no one was killed.
Fiat Chrysler spokesman Eric Mayne said the company is cooperating with the investigation and it no longer uses the inflators that are being investigated.
-- Bloomberg News
Blue Bell: Texan's funding ensures return
BRENHAM, Texas -- An investment by a prominent Texas businessman will ensure the return of Blue Bell ice cream to the market after listeria contamination prompted a shutdown in manufacturing, the company said Tuesday.
Billionaire businessman Sid Bass, an investor and philanthropist whose father and uncle built an oil fortune, has become a partner in Brenham-based Blue Bell Creameries, Chief Executive Officer and President Paul Kruse said in a statement.
The privately held company stopped production at its Brenham; Broken Arrow, Okla.; and Sylacauga, Ala., plants after issuing a national recall in April because of concerns about listeria. Its ice cream was linked to 10 listeria illnesses in four states, including three deaths in Kansas.
A Food and Drug Administration investigation found that Blue Bell knew that it had listeria in one of its plants for almost two years before the recall.
No date has been given for when Blue Bell products could be back in stores.
-- The Associated Press
Business on 07/15/2015