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US health care and pharmaceutical giant Johnson & Johnson on Tuesday said rising costs pushed earnings lower in the first quarter.
Net earnings fell 10.6 percent to $3.50 billion in the quarter to March 31, compared to a year earlier, despite an 8.5 percent rise in sales to $17.5 billion.
Cost of sales grew 13.0 percent, pushing net earnings as a percent of sales to 20.0 percent from 24.2 percent.
Earnings per share fell 13.5 percent to $1.22 from $1.41. The company said domestic US sales gained 11.2 percent in the quarter and international sales rose 6.3 percent.
The company said earnings were also hit by after-tax special items amounting to $600 million, mainly due to litigation expenses and costs related to the acquisition of medical device manufacturer Synthes.
On a narrower measure used by analysts, earnings per share before provision for taxes on income -- excluding the after-tax special items -- came in at $1.44 a share, compared to $1.37 a year earlier and four cents better than expected.
"We delivered solid first-quarter results led by the success of many of our recently launched pharmaceutical products and the addition of Synthes to our orthopaedics business," said chairman and chief executive Alex Gorsky in a statement.
"Our investments to advance our pipelines and expand our global presence, along with the outstanding efforts of our talented people, will enable us to continue to deliver sustainable growth and meaningful innovations to patients and customers around the world."
J&J, which sells consumer products including Listerine, Band-Aid, Tylenol and Splenda, and a portfolio of common prescription drugs, confirmed its forecast of earnings for the full year of $5.35-$5.45 a share, excluding special items.