The ever increasing legal costs of Johnson & Johnson seem to have eaten into the company’s profits for the first-quarter, which suffered a drop of 14%. The company is currently fighting several thousand lawsuits regarding its popular baby talc powder and has had to shell out nearly $400 million for settling 25,000 cases regarding its well-known blood thinner called Xarelto.
However, on Tuesday, the renowned health company reported earnings better than that had been expected, with its shares closing up by greater than 1%. As per reports by J&J, net income in the first-quarter was worth $3.75 billion or approximately $1.39 for a share. This was down by 14% from figures of $4.37 billion or approximately $1.60 for a share back in 2018. After adjustment, J&J was able to earn $2.10 for a share. This was above the figure of $2.03 for a share as expected by the analysts who were surveyed and questioned by Refinitiv.
According to the Chief Financial Officer of the company, Joseph Wolk, strength of the results of their first quarter has been successful in reinforcing the confidence the company has in their broad-based model of business. He further said that they will continue managing their portfolio in a disciplined manner and invest throughout the enterprise for that position so as to achieve sustainable growth in the long run across 3 vital facets when it comes to health care.
The legal expenses of J&J have grown greatly in the last few months. It has spent nearly $423 million for litigation expenses in first quarter, in addition to the $1.29 billion spent during fourth quarter. The legal costs of the company during 2018 first quarter of 2018 came to be zero. Currently, the company has been accused of being responsible of cancer via its baby talcum powder. Further, there was a settlement worth $775 million for Xarelto, which J&J made with its partner in Europe for the drug, Bayer.