Two of the drug industry's bigger names -- Johnson & Johnson (JNJ) and Abbott Labs (ABT) -- managed to top Wall Street's profit expectations for third quarter earnings this week, revealing that diversification in product portfolios helped their bottom lines. But the better-than-expected results were met with opposite responses from investors, with J&J punished because its sales fell short of investors' hopes. Abbott shares, meanwhile, headed higher after reporting that third-quarter sales for its arthritis drug Humira, the drugmaker's biggest product, surged 24 percent to $1.49 billion, beating analyst estimates.
New Brunswick, N.J.-based J&J earned $3.35 billion, or $1.20 a share, compared with $3.31 billion, or $1.17, in the year-ago period. Analysts expected earnings of $1.13 a share. Despite the stronger showing, it seems investors' fears regarding generic competition materialized. Even though the Band-Aids maker managed to grow profit by 1.1 percent, it did so predominantly through cost cuts and lower taxes. More worrisome, sales declined 5.3 percent to $15.1 billion from $15.92 billion, missing the Street's revenue estimate of $15.19 billion.