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Johnson & Johnson's 1st-Quarter Earnings and Revenue Edge Past Projections

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GuruFocus.com
·3 min read
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Johnson & Johnson (NYSE:JNJ) released its first-quarter results before the opening bell on April 14. The world's biggest maker of health care products posted an earnings and revenue beat, but provided a bleak profit outlook for the full-year due to the coronavirus pandemic.

The company has invested more than $1 billion, collaborating with federal Biomedical Advance Research and Development Authority, toward coronavirus vaccine research.


Key metrics

The New Brunswick, New Jersey-based company recorded adjusted earnings of $2.30 per share in the first quarter, up 9.5% year over year. Revenue of $20.7 billion was up 6.7%. Analysts had predicted earnings of $2 per share on $19.47 billion in revenue.

"Our strong performance in the first quarter reflects the efforts of our teams around the world and the sustainability of our business model," CEO Alex Gorsky said. "Today, our Board of Directors approved an increase in our quarterly dividend for the 58th consecutive year, underscoring our commitment to delivering value for our shareholders and the confidence we have in our business now and in the future."

The pharmaceutical giant has raised its quarterly dividend by 6.3% to $1.01 per share.

Segment performance

Operational sales of consumer health care products, excluding the impact of acquisitions and divestitures, jumped 11% for the first quarter. The company cited strong sales of Neutrogena beauty products as well as over-the-counter products such as Tylenol and Motrin analgesics.

The pharmaceutical unit, which accounts for more than 50% of the company's revenue, witnessed operational sales growth of 10.2% year over year to $11.13 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, an oral, once-daily therapy approved for use in treating certain B-cell malignancies.

Medical device operational sales, barring the acquisitions and divestitures, declined 8.2% to $5.9 billion. The coronavirus outbreak compelled hospitals to defer elective surgeries.

Outlook

Considering the impact of Covid-19, the company lowered its 2020 earnings guidance from $8.95 to $9.10 to $7.50 per share. Revenue is expected to be around $77.5 billion to $80.5 billion. This is more than its prior estimate of $85.4 billion to $86.4 billion.

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

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This article first appeared on GuruFocus.