It's no surprise to experts and most of Wall Street that Johnson & Johnson's second-quarter earnings were less than favorable, largely due to the months of over-the-counter drug recalls.

The company announced Tuesday sales of $15.3 billion for the second quarter, a 0.6 percent increase from 2009's second quarter earnings, according to the company. Domestic sales declined 2.8 percent, but international sales increased 4.1 percent.

"While somewhat expected, given JNJ's ongoing consumer recall-related challenges and less favorable [foreign exchange], we're inclined to think the sales miss was even worse than expected," according to a letter sent to investors from health care investment bank Leerink Swann.
Net earnings and diluted earnings per share for the second quarter were $3.4 billion and $1.23 billion, respectively.

The company announced its earnings guidance for the full year of 2010 to be $4.65 to $4.75 per share. According to a company statement, the guidance "now reflects the impact of the voluntary recalls announced earlier this year of certain over-the-counter medicines and the suspension of manufacturing at the McNeil Consumer Healthcare facility...as well as unfavorable changes in the foreign currency exchange rates."

The recalled products -- Tylenol, Motrin and Benadryl -- were shipped to the United States, Fiji, Guatemala, Dominican Republic, Puerto Rico, Trinidad and Tobago and Jamaica, according to a DOTmed News report. As of July 12 there were more than 60 million packages recalled.

"Remedial actions to address the product quality issues at McNeil Consumer Healthcare are ongoing and of high importance," said William Weldon, chairman and CEO of Johnson & Johnson in a statement. "At the same time, we continue to make significant investments in acquisitions, strategic partnerships and in advancing our pipeline, positioning us well for future growth."

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