Johnson & Johnson (JNJ, Financial) released its fourth-quarter earnings before the opening bell on Jan. 22, topping expectations on the back of superb sales of its psoriasis treatment and cancer drug. Sales in the consumer goods businesses improved only a little, while medical devices continued to struggle.
By the numbers
The health care giant recorded adjusted earnings of $1.97 per share, which was 2 cents more than what Wall Street was anticipating. Revenue came in at $20.4 billion, beating expectations of $20.2 billion. Operational sales surged 3.3%, domestic sales climbed 1.5% and international sales increased 0.4%.
Segment details
Johnson & Johnson's consumer business saw slender revenue growth of 0.28% on a year-over-year basis to $3.55 billion. Results were impacted by a 3.47% decrease in baby care sales to $473 million.
Shifting gears, the company’s medical devices division did not perform well as sales came in at $6.67 million, just shy of Wall Street’s expectations of $6.68 billion.
The pharmaceutical segment won the quarter as sales of $10.19 billion surpassed analysts’ projections of $9.99 billion. The sector grew 2.8% in the U.S. and 13.7% globally. Revenue was boosted by stellar performance from Stelara, an anti-inflammatory treatment, whose sales reached $1.44 billion.Â
Financial forecast
The company projects 2019 earnings per share will range from $8.50 to $8.65. Revenue for the same period is estimated to be in the range of $80.4 billion to $81.2 billion, which is less than what Wall Street has forecasted ($82.61 billion).
Sales growth to slow down in 2019
Despite posting an earnings and revenue beat, the company said sales growth will come to a halt this year. It expects its drug, medical device and consumer operations to witness combined revenue growth of around 0% to 1% in 2019. This indeed poses a threat to several health care companies.
Disclosure: I do not hold any positions in the stocks mentioned.
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