(CTN News) – On Tuesday, Johnson & Johnson announced adjusted earnings and revenue that exceeded Wall Street’s expectations, and raised its full-year forecast as its pharmaceutical unit led all business units to growth.
There was a 5.6% increase in sales over last year for Johnson & Johnson during its first quarter.
Consumer staples reported a net loss of $68 million, or 3 cents per share, due to liabilities associated with its talc baby powder product and costs associated with its planned consumer health spinoff.
The company reported a net income of $5.2 billion during the same period last year with a share price of $1.93 per share. An adjusted earnings per share of $2.68 was reported after excluding certain items.
According to a Refinitiv survey,
Johnson & Johnson results exceeded Wall Street expectations:
Adjusted EPS: $2.68, versus $2.50 expected
Estimated revenue is $24.75 billion, compared with $23.67 billion
According to J&J, sales in 2023 will be $97.9 billion to $98.9 billion, about $1 billion more than in January. From $10.45 to $10.65 per share, the company raised its full-year adjusted earnings forecast to $10.60 to $10.70 per share.
In early trading, the company’s shares dropped about 2%. With a market value of roughly $430 billion, the stock is down more than 6% for the year.
Company CFO Joseph Wolk told us on Tuesday that consumer health, pharmaceuticals, and medical devices are performing well.
During the “Squawk Box,” he stated that the company had adjusted guidance “responsibly.” As far as 2023 is concerned, we have a very positive outlook. “The first quarter growth for all three business units has been stronger than that of the fourth quarter.”
According to him, J&J’s drug for multiple myeloma and procedural data in its medical devices division give the company a sense of optimism about the future.
During the quarter, Johnson & Johnson reported pharmaceutical sales of $13.4 billion, a 4% increase. This increase was attributed to sales of Darzalex, a biologic that treats multiple myeloma, and Stelara, which treats a number of immune-mediated inflammatory diseases.
Later this year, Stelara’s patent will expire. “We’re committed to growing through this loss,” Wolk said during a conference call.
In the first quarter of 2022, the company’s medical devices division sold nearly $7.5 billion in sales, up 7.3%. Abiomed, a cardiovascular medical technology company, was acquired by J&J last year.
Johnson & Johnson consumer health business reported $3.8 billion in sales, which is being spun off into its own publicly traded company this year. With Tylenol and skin health products from Neutrogena and Aveeno, that unit grew 7.4% over the same period last year.
As Wolk told CNBC, the separation of consumer health is “making great progress.” Exactly when the separation will take place has not been made clear yet.
As a result of the company’s strong performance in 2022, J&J’s board has approved a 5.3% dividend increase to $1.19 per share.
During this earnings season, the New Brunswick, New Jersey-based company’s shares rose after it clarified the lengthy legal dispute regarding its talc-based baby powder products. J&J offered to settle thousands of cancer claims over the next 25 years by paying nearly $9 billion.
Also earlier this month, Johnson & Johnson subsidiary LTL Management refiled for Chapter 11 bankruptcy protection after its first attempt failed.
In a conference call, Wolk said the company would file for bankruptcy in mid-May. A total of 60,000 claimants have already committed to voting in favor of the plan, he said, indicating that he is confident they will approve it.
According to Andrew White, Johnson & Johnson assistant general counsel, the company expects to win over a small but “vocal minority” of plaintiff attorneys.
In response to the talc allegations, Wolk called it “unfortunate” that J&J would have to spend money on “quite frankly baseless scientific claims.”
In lawsuits filed against the company, asbestos is alleged to have caused ovarian cancer in thousands of women. The talc products of J&J have been linked to several deaths.