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Johnson & Johnson Shares Pop on Stronger-Than-Expected 4th-Quarter Results

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GuruFocus.com
·2 min read
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- By Mayank Marwah

Johnson & Johnson (NYSE:JNJ) released its fourth-quarter fiscal 2020 results before the opening bell on Jan. 26. The world's biggest maker of consumer health care products posted an earnings and revenue beat and provided a strong outlook for the full-year 2021.

By the numbers

The New Brunswick, New Jersey-based company recorded adjusted earnings per share of $1.86 in the quarter, down 1.1% year over year. Revenue of $22.48 billion gained 8.3% year over year. Analysts had predicted EPS of $1.82 on $21.67 billion in revenue.


CEO Alex Gorsky said the following:


"Our notable full year performance reflects the continued confidence from patients, physicians, customers and consumers in our life-enhancing products and medicines, particularly throughout the COVID-19 pandemic, I'm incredibly proud of our Johnson & Johnson teams around the world for going above and beyond to meet stakeholder needs. These efforts, and our commitment to families around the world as the largest broad-based healthcare company, enabled us to lead in the fight against COVID-19. We continue to progress our COVID-19 vaccine candidate and look forward to sharing details from our Phase 3 study soon. Johnson & Johnson was built for times like these, and I am extremely confident in our ability to deliver lasting value and continued innovation in 2021 and for years to come."



Shares of the stock surged 0.83% to $167.40 in pre-market trading following the earnings release.

Segment performance

Operational sales of consumer health care products, excluding the impact of acquisitions and divestitures, rose 2% for the fourth quarter to $3.6 billion. The growth was primarily driven by strong sales of skin health and beauty care products. Additionally, robust sales of over-the-counter products such as Tylenol analgesics, digestive health care products and Listerine mouthwash contributed to the segment's quarterly growth.

The pharmaceutical unit, which accounts for more than 50% of the company's revenue, witnessed operational sales growth of 14.6% year over year to $12.26 billion, without considering the impact of acquisitions and divestitures. The company attributed the growth to strong sales of anti-inflammatory treatment Stelara as well as Imbruvica.

Medical device operational sales, barring the acquisitions and divestitures, declined 2.2% to $6.58 billion as the coronavirus outbreak compelled hospitals to defer elective surgeries. This, however, reflects a recovery from a 3.3% sales decline reported in the third quarter.

Outlook

The company has issued full year 2021 guidance. Adjusted EPS is projected to be in the range of $9.40 to $9.60. Operational revenue is expected to be around $88.8 billion to $90 billion.

Disclosure: I do not hold any positions in the stocks mentioned.

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This article first appeared on GuruFocus.