Johnson & Johnson (JNJ, Financial), the healthcare giant, saw a minor dip in its stock by 2% following the release of its first-quarter earnings. The report highlighted a modest increase in earnings per share (EPS) and revenue, marking a continuation of the company's financial growth, albeit at a slower pace compared to previous quarters. Specifically, JNJ's revenue increased by 2.3% year-over-year to $21.38 billion, aligning with expectations.
Concerns arose as JNJ slightly reduced its forecast for FY24 sales, attributing the adjustment predominantly to foreign exchange (FX) influences. Despite this, the company raised its operational sales outlook (constant currency) and announced a 4.2% increase in its dividend. JNJ emphasized a strong start to 2024, driven by momentum in its Innovative Medicine and MedTech segments, alongside noteworthy regulatory and clinical achievements.
The Innovative Medicine segment, previously known as Pharma, reported a 1.1% year-over-year sales growth to $13.56 billion in Q1. This growth was fueled by a robust performance in the U.S. and the successful launch of new products, particularly in the multiple myeloma portfolio and pulmonary hypertension treatments. However, JNJ cautioned about the sustainability of this growth pattern moving forward.
The MedTech segment outperformed with a 4.5% year-over-year sales increase to $7.82 billion, led by significant contributions from cardiovascular and electrophysiology products. The acquisition of Abiomed was highlighted as a key driver of growth, particularly through the adoption of Impella technology.
Additionally, JNJ's recent move to acquire Shockwave Medical (SWAV, Financial) is set to enhance its cardiovascular intervention capabilities and reinforce its presence in high-growth markets. This strategic acquisition is poised to bolster JNJ's offerings in treating coronary and peripheral artery diseases, with expectations to finalize the deal by mid-2024.
In summary, while JNJ's Q1 earnings showcased steady growth, the performance did not reach the high marks set in previous quarters. The MedTech segment's growth indicates a return to elective surgical procedures post-pandemic, and the dividend increase signals confidence in financial health. However, the overall impact of the quarter's results was muted, setting a cautious tone for the year ahead.
