Johnson & Johnson (NYSE: JNJ) reported its third quarter figures this morning, and while the company managed to post better than expected earnings, its revenues were lower than analysts had expected.Going into this morning's earnings report analysts had estimated J&J would earn $1.13 per share in the third quarter. The company was able to put up better than expected earnings results, saying it earned $1.20 per share in the quarter. But revenues disappointed. Analysts had forecast the company's revenues would be $15.22 billion in the quarter, but actual revenues were below estimates at $15.08 billion.
The company's profits were definitely helped by cost cutting measures that have been put in place to help fight off the economic slowdown. Earlier this year, the company cut around 900 jobs from its U.S. pharmaceutical business and consolidated it management structure.
While the cost cutting may have helped the bottom line, it could not disguise the lackluster top line figure. In today's market, everyone is paying attention to revenues, and even if a company can put up better than expected earnings, revenues must also be strong for Wall Street to reward the stock.
Even as the diversified health care giant raised its fiscal 2009 per-share earnings guidance, the lower than expected revenues brought out the sellers who have pushed down the stock 2.1%, or $1.28, this morning to $61.25.
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