MarketWatch and the news organization Reuters posted the following announcement on January 23, 2007:
Excluding One-Time Expenses, Johnson & Johnson Beats Estimates
Johnson & Johnson released its fourth quarter 2006 earnings . . . announcing that net income rose to $2.17 billion (Earnings Per Share of $0.74), from $2.1 billion (EPS of $0.70) during the prior year quarter. Excluding a one-time charge surrounding the acquisition of Pfizer Inc.’s consumer healthcare unit, Johnson & Johnson earned $0.81 EPS.
The report goes on to say that financial analysts were expecting earnings per share of 79 cents.

a. Which earnings per share figure (the 74 cents actually earned or the 81 cents earned if the special charge is ignored) is more important to investors interested in Johnson & Johnson?
b. Were the financial analysts who follow Johnson & Johnson pleased with the company’s results?
c. What challenges will investors face when reviewing future financial statements of Johnson & Johnson?

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