Johnson & Johnson Thursday reported second-quarter revenue and adjusted profits that beat Wall Street expectations and raised full-year guidance as sales from medtech business jumped.
The medtech department provides devices for surgery, orthopedics and ophthalmology. The corporate is benefiting from a rebound in demand for non-urgent surgeries amongst older individuals who have postponed them in the course of the pandemic. This increased demand has been observed by health insurers comparable to UnitedHealth group and Elevance Health.
Here’s how J&J results in comparison with Wall Street expectations, based on an analyst survey by Refinitiv:
- Earnings per share: Adjusted $2.80 versus expected $2.62
- Income: USD 25.53 billion in comparison with the expected USD 24.62 billion
J&J shares rose about 2% in Thursday’s premarket trading. J&J shares have fallen greater than 10% in a yr, bringing the corporate’s market value to roughly $412 billion.
J&J, whose financial results are considered leading the best way for the broader healthcare sector, said its sales for the quarter were up 6.3% in comparison with the identical period last yr.
The pharmaceutical giant reported net income of $5.14 billion, or $1.96 per share. This equates to net income of $4.8 billion, or $1.80 per share same period a yr ago.
Excluding certain items, adjusted earnings per share were $2.80 for the period.
J&J now forecasts full-year sales of $98.80 billion to $99.80 billion, about $1 billion greater than forecast in April.
The corporate raised its 2023 adjusted earnings forecast to $10.70 to $10.80 per share, from a previous forecast of $10.60 to $10.70 per share.
The corporate’s medical device sales rose to $7.79 billion, up 12.9% from the second quarter of 2022.
J&J said the rise comes from electrophysiology products that evaluate the center’s electrical system and help doctors understand the reason for abnormal heart rhythms. Wound closure products and devices for orthopedic or major skeletal or muscular injuries also contributed.
J&J said its December acquisition of Abiomed, a cardiovascular medical technology company, also helped drive that growth.
J&J reported $13.73 billion in pharmaceutical sales, up greater than 3% year-over-year. Excluding sales of the unpopular Covid vaccine, the pharmaceutical division earned $13.45 billion.
The corporate focuses on developing drugs for various disease areas.
The corporate says the expansion was driven by sales of Darzalex, a biologic drug used to treat multiple myeloma, Erleada, a prostate cancer drug, and blockbuster Stelara, which is used to treat a spread of immune-mediated inflammatory diseases.
J&J will lose patent protection on Stelara later this yr.
The rise was partly offset by declining sales of the arthritis drug Remicade, which competes with biosimilars, that are cheaper drugs with an almost similar structure.
This quarter was the primary without sales within the US of J&J’s unpopular Covid vaccine. In April, the corporate said it didn’t expect any domestic revenue beyond what it reported in the primary quarter as its obligations under government contracts were accomplished.
However the shot still grossed $285 million in international revenue.
J&J’s consumer health division expanded as an independent company under the name Kenvue in early May, mid-quarter.
J&J still owns nearly 90% of Kenvue and plans to transfer it to its shareholders later this yr.
J&J said the corporate earned $4.01 billion in sales within the quarter, up 5.4% from the identical period a yr ago.
This increase was mainly from over-the-counter products comparable to Tylenol, the pain reliever Motrin, and upper respiratory products. Skincare and sweetness products under the Neutrogena brand contributed to the expansion of international sales.
J&J’s quarterly results come amid investor concern over hundreds of lawsuits alleging the corporate’s talc-based products were contaminated with the carcinogen asbestos, which has caused ovarian cancer and several other deaths.
These products, comparable to the J&J baby powder of the identical name, at the moment are under the Kenvue brand. But J&J will take over all talc liabilities that can arise within the US and Canada.
In April, J&J’s subsidiary, LTL Management, filed for bankruptcy in Recent Jersey, offering to pay nearly $9 billion to settle greater than 38,000 lawsuits and forestall recent cases from arising. That is the corporate’s second try to resolve its talc claims in bankruptcy court after a federal appeals court rejected an earlier offer.
A lot of the litigation was suspended in the course of the bankruptcy proceedings.
J&J continues to disclaim the allegations and says its talc products don’t cause cancer.