Johnson & Johnson's ($JNJ) $21.3 billion Synthes acquisition is starting to pay off, as the company reported a 12.5% third-quarter increase in medical device sales due largely to its fresh-bought orthopedics offerings.
J&J pulled in $7.1 billion from its device and diagnostics arm, bolstered by the $2.3 billion in orthopedic revenue, a 65.5% increase over last year's pre-Synthes Q3. The acquisition is responsible for 5.8% of the company's worldwide sales growth, and J&J's total third-quarter revenue was $17.1 billion, a 6.5% increase over last year.
However, the big numbers from Synthes hardly tell the whole story for J&J's device business. Outside of the banner orthopedics growth, J&J saw sales drops in its cardiovascular, diabetes, diagnostics and surgical care units, with single-digit growth in vision care, specialty surgery and infection prevention.
But J&J is being proactive about hunting down new opportunities. CEO Alex Gorsky said in April that J&J would look to acquisitions to expand its device sales in emerging markets, and the company is planning to launch four "innovation centers" around the world to scout for deals and partnerships.
Stateside, J&J's DePuy unit is looking to move on from recalls past and enter the growing hip arthroscopy market, and surgical supply unit Ethicon is spending $185 million to expand its suture-production capabilities.
J&J's net profits came in at about $3 billion for the third quarter, beating Wall Street estimates but still presenting a 7% drop from the same period last year.
- read J&J's release
- check out the full results (PDF)