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Johnson & Johnson CFO on weakening euro: Financial markets will ‘do what they may'

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Yahoo Finance’s Anjalee Khemlani joins the Live show to recap her interview with Johnson and Johnson CFO Joseph J. Wolk.

Video Transcript

BRAD SMITH: Johnson & Johnson cut its full year earnings and revenue projection, blaming currency effects. Last quarter's numbers, though, did beat estimates. Yahoo Finance's Anjalee Khemlani joins us now to break it all down. Anjalee, you spoke with Johnson & Johnson's CFO Joe Wolk earlier today, too.

ANJALEE KHEMLANI: I did, and he did talk about that, about the fluctuation in the currency, and specifically framing it within the context of the euro's fall. That's something that they were talking about on the earnings call today. It seems like there's a lot going on for the company, especially when you think about the split with the consumer unit as well. That is taking off, and they're looking to establish a lot more in terms of naming and location, et cetera, on that.

But when it comes to overall, the COVID vaccine is still playing a small role in the company's pharma unit. Meanwhile MedTech and Consumer saw a bit of a drop, facing headwinds from the pandemic ongoing, as well as just generally. So here's a listen to what he had to say about all that

JOE WOLK: I think, just like the rest of the world, we're learning to live with the pandemic, and new variants of COVID, and surges that may occur. The nice thing about Johnson & Johnson is we're not one product reliant. We're not one market reliant.

So we have the breadth and depth with across our portfolio to be able to absorb some of that impact. It doesn't mean it's not a trivial factor. We continue to monitor it and adjust accordingly. But we're pretty well positioned to manage anything that may come by way of unexpected surprises.

ANJALEE KHEMLANI: What about the general trend in the industry? I know increasingly, a lot of providers are looking for at-home solutions. Patients themselves are looking for at-home solutions when it comes to technology. What is Johnson & Johnson thinking about that? Because I know largely, you're in the surgical space. So what do you think about that, moving forward? Is there a room for growth, and have you started thinking about a product line?

JOE WOLK: Yeah, so I think when you think about our portfolio, our solutions are really designed to address that relationship between the physician and the patient. Some of the at-home modalities that you're speaking of are really around diagnosis. You look specifically in mental health, which I think has been transformational in terms of some of the progress we've been able to make there-- at a very important time-- to enable people to talk to somebody. And I think at that point, that's a different service than maybe what Johnson & Johnson has typically provided. We certainly want to lessen the burden in terms of patients and how their drugs are administered.

Let's take an example like Darzalex, where about two years ago, to get Darzalex treatment, a patient was going to an infusion center, spending about five or six hours for that infusion. We were able to have a subcutaneous formulation, where now that five to six-hour infusion time is down to 20 minutes. So not only is that alleviating the burden for the patient, it also alleviates the stress on the healthcare system. And that's really where we can play, in terms of how the drug is administered and opportunities like that.

ANJALEE KHEMLANI: Shifting gears, looking at other headwinds, I know the euro's fall has been something that you're going to be pointing out on the call. Talk to me about that, and what you anticipate as the outlook for the company, as a result of the euro's fall.

JOE WOLK: Yeah, so the change, or the impact, that you see in our results is purely translational. Our treasury team does a great job here in terms of hedging 12 to 18 months out. So there's some noise in our PNL, but that's not a dramatic impact in terms of our results. It's really around the translational aspect. And it really gets back to us focusing on our operational performance. We can control what we can control, and then we'll let the financial markets do what they may.

There's some talk-- if we look at this morning and how the US dollar is trading relative to the euro-- it looks like the dollar has weakened a little bit. That will be good for Johnson & Johnson, as it would for any multinational company that has significant sales outside the US. So we'll continue to monitor it. I don't know that there's much we can do to influence it, though.

ANJALEE KHEMLANI: So as you can hear, a lot in there. And I loved his comment about the markets will do what they do. It kind of feels like our day-to-day, right?

JULIE HYMAN: Yes, not just today.

BRAD SMITH: We've been keeping eyes on shares of J&J. We know you will be as well. Anjalee Khemlani, Yahoo Finance's own. Thanks so much for joining us.