- Johnson & Johnson reported adjusted earnings and revenue that beat expectations but lowered its sales guidance for its pharmaceutical business, causing its shares to dip.
- Earnings per share came in at $2.68 adjusted, versus the $2.50 Wall Street expected. Revenue for the first quarter was $24.75 billion, topping forecast for $23.67 billion.
- J&J’s sales during the quarter grew 5.6% y/y, but it reported a net loss of $68 million due to its talc baby powder liabilities and costs tied to the spinoff of its consumer health business. The company proposed to pay nearly $9 billion to settle thousands of allegations that its baby powder and other talc products caused cancer. Adjusted operational growth stood at 7.6%, while operational growth was at 9.0%.
- In its segments, the company reported $13.4 billion in pharmaceutical sales, up 4% y/y, and $7.5 billion in medical devices sales, up 7.3% y/y. Its consumer health business grew 7.4% y/y, reporting sales of $3.8 billion.
- J&J raised its 2023 sales forecast to $97.9 billion to $98.9 billion and full-year adjusted earnings outlook to $10.60 to $10.70 per share.
- Management increased their fiscal year guidance, which is positive, and the medical technology division exhibited favorable acquisition-based expansion. However, the market is forward looking, and the reality that COVID-19 vaccinations (which astonishingly increased by 64% y/y) played a significant role in this earnings report is a source of apprehension. J&J did however, announce a 5.3% quarterly dividend increase to $1.19 per share. This is the 61st consecutive annual dividend increase for this dividend aristocrat. It is a stock which I hold in portfolios for clients.
By Lee Kern
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