On a day in which the healthcare conglomerate announced its fourth-quarter earnings and guidance for 2013, New Brunswick, N.J.-based J&J said it has begun a process to evaluate strategic options for its Ortho Clinical Diagnostics business.
J&J said that it would evaluate all options, including a possible divestiture, if it determines that the business has greater potential "as part of another organization whose focus is more closely aligned with its core strengths" or, by comparison, if the unit is better off as a standalone company.
J&J cautioned that it isn't certain at this time that it will make a deal at all.
The OCD business is based in Raritan, N.J., and brought in $2.07 billion in sales last year from products such as diagnostic tests and blood screening supplies. That figure represents a 4.4% drop from the roughly $2.16 billion the segment posted in 2011, the company reported Tuesday, Jan. 22.
The unit is part of J&J's Medical Devices & Diagnostics operation, one of its three main business lines along with its consumer health division and its pharmaceuticals segment. The MD&D unit brought in about $27.4 billion of J&J's $67.2 billion in revenue in 2012 and is the largest medical technology entity in the world. That business took a sizable leap in 2011 when the company agreed to pay $21.3 billion for Swiss medical device maker Synthes Inc. in what is the largest deal in J&J's history.
In addition, J&J reported its 2012 results and issued guidance for its 2013 earnings. The company posted $10.9 billion in net income and $3.86 in earnings per share on $67.2 billion in revenue last year. It also expects between $5.35 and $5.45 in earnings per share for 2013, which is below consensus analyst estimates, according to a research note from Leerink Swann LLC's Danielle Antalffy.
J&J's stock traded at $72.76 per share Tuesday, down slightly from a $73.23 per share close on Jan. 18.
Rory Cullinan will leave his role as chairman of Royal Bank of Scotland Group plc's investment bank at the end of April. For other updates launch today's Movers & shakers slideshow.
Dodd-Frank, the conventional wisdom goes, will prevent a repeat of the events of the 2008 just at the Securities Act of 1933 and the Securities Exchange Act of 1934 made U.S. securities markets safe for individual investors. Paul Mahoney offers another view of the similarity between Dodd-Frank and the New Deal legislation in his new book Wasting a Crisis: Why Securities Regulation Fails. More video