Pfizer Inc. (PFE), Abbott Laboratories (ABT): Can Johnson & Johnson (JNJ) Turn Around This Lagging Business?

Currency issues are hitting every segment in this business: International sales, which make up the majority of consumer health revenue, fell around 3.5% last year. Still, it’s not all currency’s fault that J&J’s having problems abroad: The company cited international competition and poor economic conditions as negatively impacting its skin care business’s results, despite sales of top brand Neutrogena climbing.

Can J&J turn it around?
Consumer care isn’t a growth investor’s dream; with revenue on the downswing and little opportunity, if any, to make a big splash with a blockbuster product like in the pharmaceuticals industry, J&J will have to slowly turn things around in this business.

Fortunately, there are avenues for growth. While international sales are lagging, J&J should turn to emerging markets to fuel its future revenue. The company boasts several strong nutritional brands such as Splenda, Lactaid, and Viactiv; with emerging markets (India in particular) demanding nutritional products as new middle classes emerge, J&J should make a push abroad with its tried-and-true brands.

Competitor Abbott Laboratories (NYSE:ABT) has already focused heavily on growing nutritional sales by investing in infrastructure in India and other developing economies, and the push has paid off by turning the business into one of Abbott Laboratories (NYSE:ABT)’s most promising segments going forward. J&J would be smart to follow in its footsteps: The company already has made inroads into India with its beauty, baby care, and OTC products, and also sells Splenda in India; boosting its nutritionals presence in the world’s second most-populous nation would increase its presence in one of tomorrow’s most attractive markets.

Investors may not look at consumer health as the most exciting of Johnson & Johnson’s many businesses, but this segment’s still a major foundation for the company’s revenue. It can’t afford to lose its edge as a leading consumer care company in the world, even with the FDA still looming over its over-the-counter business and sales falling. This segment’s just as important to Johnson & Johnson’s future as its medical devices and pharmaceuticals.

The article Can Johnson & Johnson Turn Around This Lagging Business? originally appeared on Fool.com and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.