Johnson & Johnson (JNJ, Financial) released its third-quarter fiscal 2020 results before the opening bell on Oct. 13. 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.
By the numbers
The New Brunswick, New Jersey-based company recorded adjusted earnings per share of $2.20 in the quarter, up 3.8% year over year. Revenue of $21.08 billion gained 1.7% year over year. Analysts had predicted EPS of $1.98 on $20.2 billion in revenue.
"Our third-quarter results reflect solid performance and positive trends across Johnson & Johnson, powered by better-than-expected procedure recovery in Medical Devices, growth in Consumer Health, and continued strength in Pharmaceuticals," CEO Alex Gorsky said. "Our world-class R&D team is working tirelessly to advance the Phase 3 trials of our COVID-19 vaccine and to uphold the highest standards of transparency, safety and efficacy; while other dedicated teams provide ongoing support to hospitals and patients as they return to sites of care, and ensure patients and consumers have the medicines and products they need."
Shares of the stock surged 1.5% to $149.55 in pre-market trading following the earnings release before dropping again as the company halted its Covid-19 vaccine trial due to unexpected illness among test subjects.
Segment performance
Operational sales of consumer health care products, excluding the impact of acquisitions and divestitures, rose 3.1% for the third quarter to $3.5 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 4.7% year over year to $11.4 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 3.3% to $6.1 billion as the coronavirus outbreak compelled hospitals to defer elective surgeries. This, however, reflects a recovery from a roughly 33% sales decline reported in the second quarter.
Outlook
The company increased its full year 2020 adjusted EPS guidance from a range of $7.75 to $7.95 to a range of $7.95 to $8.05. Revenue is expected to be around $82 billion to $82.8 billion, which is more than its prior estimate of $79.9 billion to $81.4 billion.
Disclosure: I do not hold any positions in the stocks mentioned.
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