Johnson & Johnson beat market expectations for revenue and earnings in the first quarter.
The pharmaceutical conglomerate reported adjusted earnings of $2.68 a share for the first quarter of 2023, up from $2.67 in the same period last year.
Quarterly revenue reached $24.75 billion, up 5.6% from last year.
Analysts expected Johnson & Johnson (ticker: JNJ) to report earnings of $2.60 per share for the first quarter on sales of $23.6 billion, according to FactSet.
“Our first quarter results show strong performance in all three segments of our business,” said CEO Joaquin Duato in a statement. “With this momentum, I look forward to the remainder of the year, one full of exciting catalysts that will create both near and long-term value for patients and all of our stakeholders.”
Advertisement – Scroll to Continue
The company raised its full-year adjusted earnings expectations to a range of $10.60-$10.70 per share, from $10.45-$10.65 previously. It raised its full-year sales expectations to a range of $97.9 billion-$98.9 billion from $96.9 billion-$97.9 billion.
Shares were up 2.2% in premarket trading on Tuesday at $169.34.
The company also declared a 5.3% increase in its quarterly dividend to $1.19 per share. The implied dividend on an annualized basis is $4.76 per share compared to the previous rate of $4.52 per share.
Advertisement – Scroll to Continue
This is breaking news. Read a preview of Johnson & Johnson’s earnings below and check back for more analysis soon.
——————————————————————————————————————————————
When Johnson & Johnson reports its earnings Tuesday morning, one big question will be on investors’ minds: What’s going on with the plan to spin off the consumer-health business as a separate company?
Johnson & Johnson is the last of the big pharma conglomerates. As peers like Eli Lilly (LLY), Pfizer (PFE), and GSK ( GSK
Advertisement – Scroll to Continue
) divested all but their core biopharma businesses, Johnson & Johnson stuck to the old model, combining a large consumer health business, a large medical devices division, and a biopharma business.
That should end this year, when Johnson & Johnson spins off its consumer health division, which sells Tylenol and Band-Aids. The new publicly traded company will be called Kenvue.
Johnson & Johnson was not clear about the timing of the separation. And now, legal issues have raised some questions about the plan.
Litigation over claims that talc in the company’s baby powder products caused cancer has again come into the spotlight. While Johnson & Johnson announced an $8.9 billion settlement agreement earlier this month, it’s not entirely clear that the litigation is over.
The company’s earnings release Tuesday morning, and an investor call to follow at 8:30 Eastern time, could bring news of the Kenvue split and the talc litigation. Investors will also be looking for updates on Stelara, an anti-inflammatory drug that could face biosimilar competition starting later this year.
Advertisement – Scroll to Continue
Johnson & Johnson stock easily beat the market in 2022, climbing 3.3% while the S&P 500 fell 19%, but they haven’t performed as well this year. The stock is down 6.2% so far in 2023, while the S&P 500 is up 7.9%.
Johnson & Johnson reports quarterly earnings before its big pharma peers, so its results are often seen as a bellwether for the sector. Investors will be looking for a reason to get back into stocks: The
S&P 500 Pharmaceuticals
The industrial group is down 3.9% this year, while the
The Health Care Select Sector SPDR exchange-traded fund (XLV) fell 1.1%.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
