Archive for December, 2010

J&J heartburn worsens as Mylanta joins recall list

Wednesday, December 1st, 2010 | Finance News

NEW YORK (Reuters) – Johnson & Johnson's consumer-product distress worsened on Wednesday as the company recalled 12 million bottles of over-the-counter Mylanta and almost 85,000 bottles of its AlternaGel liquid antacid.

J&J said the actions, which it described as "wholesale and retail level" recalls, were taken because the presence of small amounts of alcohol from flavoring agents was not noted on product packaging.

"It is unlikely that use of these products will cause either alcohol absorption or alcohol sensitivity adverse events," the company said on its Mylanta website.

Although wholesalers and retail outlets are obliged to clear their shelves of the products, the company said consumers may continue to use the medicines, which contained concentrations of less than 1 percent alcohol.

The brands are manufactured as part of a 50/50 joint venture with Merck & Co, formed to develop and make nonprescription drugs primarily derived from Merck's prescription drugs.

J&J said the joint venture's products were made at a J&J plant in Fort Washington, Pennsylvania, that has been shut down to fix hygiene problems and other quality control lapses that in the past year have forced huge recalls of J&J's own iconic consumer brands.

Just a week ago, J&J recalled 9 million bottles of Tylenol because packaging did not adequately inform customers about the presence of trace amounts of alcohol. They were made by a third-party manufacturer.

All told, more than 200 million bottles of J&J products have been recalled in the past year, including painkillers Tylenol and Motrin, allergy treatment Benadryl and Rolaid antacid.

The crisis has harmed J&J's once-pristine image and is beginning to take a significant toll on its financial results. U.S. sales of J&J's consumer products plunged 25 percent in the third quarter as scores of formulations became unavailable and customers opted instead for generic store brands.

Quality-control problems have also hounded J&J's factory in Las Piedras, Puerto Rico, forcing recalls of Benadryl and Tylenol in June.

Wells Fargo analyst Larry Biegelsen on Tuesday cautioned the U.S. Food and Drug Administration could temporarily shut down or seize the Puerto Rico plant, after having recently inspected it and noting unresolved quality-control lapses in an agency report filed November 2.

The negative report, called a Form 483, follows a similar one issued by the FDA after an inspection of the plant in January and February, Biegelsen said.

Biegelsen said the Puerto Rico plant produces most of the over-the-counter drugs sold in the United States by J&J's McNeil consumer healthcare division.

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Finisar posts profit on stronger demand for optics

Wednesday, December 1st, 2010 | Finance News

SAN FRANCISCO – Finisar Corp. on Wednesday posted a profit in its fiscal second quarter on stronger demand for its optical networking equipment. A higher-than-expected forecast lifted the shares in aftermarket trading.

The company's net income was $33.8 million, or 39 cents per share. In the same quarter last year, the company lost $31.5 million, or 49 cents per share.

Excluding items, the company earned 44 cents per share. Analysts expected 38 cents per share. Analysts generally exclude one-time items.

The company's fortunes were lifted by substantially higher sales. The company sells to makers of data storage systems and computer networking and telecommunications equipment. Some customers include Cisco Systems Inc., Hewlett-Packard Co. and IBM Corp.

Finisar's products include transmitters and receivers that help connect pieces of computer networks.

Revenue rose 65 percent to $240.9 million, from $145.7 million last year.

Also helping the latest quarter's results was the fact Finisar didn't record any restructuring costs, whereas in the same period last year it had $4.2 million in such costs related to it closing part of a facility in Texas and moving some manufacturing work to a cheaper facility in Malaysia.

For the fiscal third quarter, the company said it expects earnings of 45 cents to 47 cents per share, higher than analysts' estimate for 41 cents per share, and revenue of $247 million to $262 million, higher than the $240 million analysts projected.

Finisar's stock rose 93 cents, or 4.7 percent, to $20.70 in extended trading, after rising 68 cents, or 3.6 percent, to $19.77 during the regular trading session.

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US automakers’ November sales jump, Toyota lags

Wednesday, December 1st, 2010 | Finance News

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NEW YORK (AFP) – US carmakers on Wednesday reported a jump in November sales as they reaped the fruit of SUV promotions and a rise in consumer confidence, while Japan's Toyota sales slipped into reverse.

"Firm double-digit gains for most in what historically is one of the year's weakest sales months could indicate the standoff with consumers and the still-wavering economy could be easing," said analyst Bill Visnic of Edmunds.com.

General Motors reported US vehicle sales for November jumped 11.4 percent from a year ago in a month marked by GM's historic return to Wall Street as it sheds government ownership following its massive bailout last year.

Ford reported US sales rose 24.3 percent in November from the same period in 2009, with 147,338 vehicles sold on the back of a 34 percent rise in truck sales.

And Chrysler, which was also salvaged by a massive taxpayers' bailout, reported US sales rose 17 percent in November from last year, in the eighth straight month of year-to-year sales increases.

Chrysler sold 74,152 vehicles last month, it said.

At the same time, Toyota, the world's largest carmaker and third in the United States, reported a 7.3 percent drop in US sales to 129,317 vehicles in November as it continues to fight a series of safety problems.

The robust sales results for US automakers, which exceeded most expectations, were due to "strengthening sales of large trucks and big SUVs (sport utility vehicles), in part, because of attractive incentives, heavy promotions and a gradually improving economy," said Edmunds.com analyst Michelle Krebs.

GM, the largest US automaker, said sales of its four brands -- Chevrolet, Buick, GMC and Cadillac -- totaled 168,704 vehicles in November, up 11.4 percent from November 2009.

"Each brand came to the party in November," said Don Johnson, US sales operations vice president.

"These results show that our brands continue to gain momentum with consumers who want stylish, fuel-efficient vehicles," he said in a statement.

GM returned to public trading on November 18, marking a dramatic turnaround for the embattled company.

The Detroit, Michigan-based automaker was forced into bankruptcy protection in June 2009 amid massive debts and a 50-billion-dollar government bailout.

The initial public offering of stock, which raised more than 23.7 billion dollars, lowered the government stake in the company below 50 percent and recouped 11.7 billion dollars for US taxpayers.

Krebs praised the results from Ford, the only Big Three carmaker to avoid bankruptcy and a government bailout.

"Every new model introduced has been a marketplace hit, most recently, the redesigned Ford Edge whose sales were up 55 percent this month. And Ford has more on deck, notably the new Ford Focus and the promising Ford Explorer," Krebs said.

"Ford's broad range of high-quality, fuel-efficient vehicles is driving one of our best years ever and positioning Ford to deliver improved results in the future," said Ken Czubay, Ford vice president of sales and marketing.

GM shares closed 1.7 percent higher and Ford stocks rose 3.3 percent.

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