Johnson & Johnson’s fourth-quarter profit fell 12% and projected lower than expected earnings in 2011. One big reason: J&J recorded a $922 million charge for the cost of defending and paying claims in the DePuy ASR hip recall lawsuits.
I don’t think $922 million is going to be enough to cover the Depuy and Pinnacle hip lawsuits. But it does give an indication that J&J is starting to put money aside to deal with the cost of the recall.
If J&J wants to increase profitability, it has to get back to the basics of making great products. It is easy to forget, J&J was once the gold standard in the industry. It has a long way to dig itself out of the hole it created.