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James Li
James Li
Articles (1537) 

Johnson & Johnson Rises on 4th-Quarter Earnings Beat

Company expects to announce candidate coronavirus vaccine results soon

January 26, 2021 | About:

Shares of Johnson & Johnson (NYSE:JNJ), a major drug manufacturer, climbed approximately 3% on Tuesday on the back of reporting fourth-quarter earnings results that topped analyst estimates.

For the quarter ended December 2020, the New Brunswick, New Jersey-based company reported net income of $1.738 billion, or 65 cents in earnings per share, compared with net income of $4.01 billion, or $1.50 in earnings per share, in the prior-year quarter. Revenue of $22.48 billion and adjusted earnings of $1.86 per share topped Refinitiv consensus estimates of $21.67 billion in revenue and $1.82 in adjusted earnings per share.

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Company reports full-year growth in several business segments

Johnson & Johnson CEO Alex Gorsky said that the strong revenue performance during 2020 reflected "the continued confidence" from patients and physicians in the company's products throughout the coronavirus pandemic. Pharmaceutical sales increased 8.4% on the back of strong growth in treatments for a wide range of cancers and treatments while Consumer Health revenue increased 3.1%, driven by strong growth in over-the-counter medicines like Tylenol, Pepcid and Zyrtec.

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Gorsky also said that the company is making good progress on its Covid-19 vaccine candidate and looks forward to sharing Phase 3 study results soon. Unlike Moderna Inc.'s (NASDAQ:MRNA) vaccine candidate and the joint candidate from Pfizer Inc. (NYSE:PFE) and BioNTech SE (NASDAQ:BNTX), which require two doses, Johnson & Johnson's vaccine requires just one shot. CNBC added that Johnson & Johnson Chief Financial Officer Joseph Wolk expects the Phase 3 study results to be "robust," although differences may exist for people tested in South Africa, where a more contagious variant of the virus exists.

Shares rise on upbeat outlook for 2021

Shares of Johnson & Johnson traded at an intraday high of $173.65, up from Monday's close of $165.95 on the back of earnings outperformance and upbeat outlook for 2021. Estimated sales of between $90.5 billion and $91.7 billion reflect an increase of between 9.5% and 11% from 2020 revenue of $82.6 billion. GuruFocus ranks the company's profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank and profit margins that outperform over 88% of global competitors.

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Gurus with large holdings in Johnson & Johnson include Pioneer Investments (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) and Yacktman Asset Management (Trades, Portfolio).

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Disclosure: No positions.

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