EARNINGS

JOHNSON & JOHNSON POSTS 17% JUMP IN FIRST-QUARTER PROFIT

Healthcare giant Johnson & Johnson posted a 17.4% increase in first-quarter profit yesterday, trouncing market forecasts as double-digit jumps in medical device and consumer-product sales offset soft pharmaceutical sales in America.

New Brunswick-based Johnson & Johnson reported record net income of $2.93 billion, or 97 cents per share, in the January-March quarter. In the same quarter a year-ago, net income was $2.49 billion, or 83 cents per share.

Analysts surveyed by Thomson Financial had anticipated earnings of 92 cents per share on sales of $12.51 billion.

“We are delighted to be able to get off to such a strong start to the new year,” J &J Chief Financial Officer Robert J. Daretta told analysts during a morning conference call.

Mr. Daretta noted the company had a gross profit of 72.9% in the first quarter, the highest in recent history. “I don’t think this rate is sustainable,” he said. “But I do think we’re going to see a very strong year in terms of gross profit.”

Mr. Daretta said J&J is raising its 2005 earnings forecast to $3.41 to $3.43 per share, up from its prior guidance of $3.38 to $3.41 per share.

– Associated Press

YAHOO! FIRST-QUARTER PROFIT DOUBLES AS AD SALES SURGE

Yahoo!, owner of the no. 2 Internet search engine, said first-quarter profit more than doubled as it sold more advertisements that appear on its Web pages and alongside search results. Net income rose to $204.6 million, or 14 cents a share, from $101.2 million, or 7 cents, a year earlier, the Sunnyvale, Calif.-based company said yesterday. Sales surged 55% to a record $1.17 billion from $757.8 million. Its profit beat the average estimate of 11 cents a share from 26 analysts polled by Thomson Financial. Yahoo! is attracting advertisers such as Walt Disney and PepsiCo that want to reach consumers who are spending more time using the Web. These big clients are buying new forms of advertising such as animated and interactive spots, and Yahoo! is capitalizing on the growth of ads linked to Web search results.

“It looks like search revenue was particularly strong, which should bode well for Google,” said Mark Mahaney, an analyst at American Technology Research.

– Bloomberg News

MERRILL PROFIT DECLINES; FIRM SETS $4 BILLION BUYBACK

Merrill Lynch & Company, the world’s biggest securities firm, said profit fell for the second straight quarter as costs rose and revenue from trading and investment banking dropped. First-quarter net income declined to $1.21 billion from $1.25 billion a year earlier and per-share profit was unchanged at $1.21, the New York-based company said yesterday. Merrill shares rose as much as 2.8% after the firm set a $4 billion stock buyback and boosted its dividend.

Merrill failed to match the trading gains that powered Goldman Sachs Group, Lehman Brothers Holdings and Bear Stearns to record fiscal first-quarter profits as revenue from principal transactions fell 15%.

Merrill said spending on technology consulting increased, as it invested in computer systems, and costs to process transactions rose.

The firm was expected to earn $1.18 a share. Goldman, Lehman, Bear, and Morgan Stanley last month reported profits that exceeded analyst estimates by an average of 23%, fueled largely by trading.

– Bloomberg News

COCA-COLA SHARES JUMP AFTER PROFIT BEATS ESTIMATES

Shares of Coca-Cola, the world’s largest soft-drink maker, enjoyed their biggest rise in 21 months after surging sales in emerging markets produced the biggest revenue gain in three quarters.

Sales in the first quarter climbed 3.7% to $5.27 billion, helped by the decline of the dollar and a 21% gain in China. Net income fell 11%, less than analysts’ estimates, to $1 billion, or 42 cents a share, from a year earlier, the Atlanta-based company said in a statement yesterday.

Chief Executive E. Neville Isdell is reviving sales after a decline two quarters ago by boosting marketing 15% on products including new flavored Dasani waters. Coca-Cola’s revenue, which trailed PepsiCo’s 7.4% gain, grew 14% in Brazil, but was stagnant in North America. “They are feeling pretty good right now,” said Douglas Lane, president of Douglas C. Lane, which oversees $1.5 billion, including 575,000 Coca-Cola shares. “Brazil, Russia, India, and China are the engine. They don’t want the home front to deteriorate. That is the game plan.”

– Bloomberg News

REGULATORY

KPMG PAYS $22 MILLION TO SETTLE SEC’S XEROX AUDIT CASE

KPMG LLP, the fourth-largest American accounting firm, agreed to pay about $22 million to settle regulators’ allegations that the company helped Xerox commit fraud. KPMG, based in New York, didn’t admit or deny the charges, the Securities and Exchange Commission said yesterday. Xerox, the largest American copier maker, restated revenue for 1997 through 2001 and neither admitted nor denied wrongdoing in paying a $10 million fine to settle the SEC’s fraud allegations in 2002.

– Bloomberg News

ENERGY

CRUDE OIL RISES ON FEARS GASOLINE DEMAND MAY DRAIN INVENTORIES

Crude oil rose almost $2 yesterday amid speculation that growing gasoline demand will erode American inventories and strain the ability of refineries to make enough of the fuel. Gasoline use in America is up 2% from a year ago, Energy Department data show. Stockpiles probably fell 250,000 barrels last week, according to the median forecast of 15 analysts Bloomberg surveyed. Refiners are expected to raise oil-processing rates in the next month as they complete seasonal maintenance. “Gasoline inventories are in decent shape, but it wouldn’t take long for the excess to disappear as we go into peak demand this summer,” said Tom Bentz, an oil broker at BNP Paribas Commodity Futures in New York. “We can’t afford any extended refinery outages.”

– Bloomberg News