NEW YORK -- The national withdrawal of Tylenol capsules reduced Johnson & Johnson's earnings by $50 million in the third quarter, the company said Thursday.
The pharmaceutical giant, on the way to one of its best years 9l history before poisoned Tylenol capsules killed seven people in Chicago, reported net profit for the quarter down 26 percent from the year before.
'The withdrawal of Tylenol capsule products from the trade and consumers, including disposal, handling and other associated costs, is estimated to result in an extraordinary after-tax charge of approximately $50 million or 27 cents per share,' Johnson & Johnson said.
The company said earnings for the quarter before the $50 million charge were $146.5 million, or 78 cents a share, compared to $129.9 million or 69 cents a share last year. The $50 million charge shaved the figure to $96.5 million or 51 cents a share.
Earnings per share for the first nine months dropped from $2.37 to $2.10 because of the recall costs. In the first three quarters of 1981, the company reported earnings per share of $2.03.
The recall costs aside, net profit for the period would have been $444 million, up 17.2 percent from $378.9 million, the company said. Because of the extraordinary expense, however, the figure slid to a 4 percent increase from the first nine months of 1981.
Sales for J&J's worldwide operations were $4.38 billion for the first nine months -- up 9.3 percent from $4.01 billion in the corresponding 1981 period.Sales for the third quarter were $1.48 billion against $1.34 billionin the year-earlier period.
The company sid it anticipated 'the capsule tampering tragedy will also negatively affect Tylenol sales and overall company earnings in the fourth quarter of 1982 and in 1983.
'The extent of this potential adverse impact is not known at this time. However, Tylenol has been a major income-producing brand and the company intends to invest heavily to reestablish the brand's market position.'