Johnson & Johnson (JNJ, Financial) released its second-quarter results before the opening bell on July 16. 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.
Key metrics
The New Brunswick, New Jersey-based company recorded adjusted earnings per share of $1.67 in the quarter, down 35.3% year over year. Revenue of $18.3 billion plunged 10.8% year over year. Analysts had predicted EPS of $1.49 on $17.6 billion in revenue.
"Our second quarter results reflect the impact of COVID-19 and the enduring strength of our Pharmaceutical business, where we saw continued growth even in this environment," CEO Alex Gorsky said. "Thanks to the tireless work of our colleagues around the world and our broad range of capabilities, we continue to successfully navigate the external landscape, and we remain focused on advancing the development of a vaccine to help address this pandemic and save lives."
Shares of the stock surged 0.5% to $149 in pre-market trading following the earnings release.
Segment performance
Operational sales of consumer health care products, excluding the impact of acquisitions and divestitures, dropped 3.4% for the first quarter to $3.3 billion. The decline was primarily driven by poor sales of skin health and beauty care products, partially offset by strong sales of over-the-counter products such as Tylenol analgesics, digestive health care products and Listerine mouthwash.
The pharmaceutical unit, which accounts for more than 50% of the company’s revenue, witnessed operational sales growth of 3.9% year over year to $10.7 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 32.5% to $4.2 billion as the coronavirus outbreak compelled hospitals to defer elective surgeries.
Outlook
The company increased its full year 2020 EPS guidance from a range of $7.50 to $7.90 to a range of $7.75 to $7.90. Revenue is expected to be around $79.9 billion to $81.4 billion, which is more than its prior estimate of $77.5 billion to $80.5 billion.
Disclosure: I do not hold any positions in the stocks mentioned.
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