Johnson & Johnson (JNJ, Financial) released its second-quarter results before the opening bell on July 16. The company posted better-than expected second-quarter earnings and revenue courtesy of robust worldwide pharmaceutical sales that more than compensated for the decline in domestic sales.
Although the company’s profits surged during the quarter, its shares fell 1% on Tuesday as a result of mounting legal costs related to lawsuits surrounding its baby powder.
Snapshot of the quarter
The New Brunswick, New Jersey-based company recorded earnings of $2.58 per share, which were up 22.8% from the prior-year quarter. Wall Street had anticipated earnings of $2.46 per share. Revenue came in at $20.6 billion, down 1.3% year over year. However, it edged past analysts’ expectations of $20.29 billion.
In a statement, Chairman and CEO Alex Gorsky commented on the company's performance:
“We delivered solid second-quarter underlying sales growth and strong earnings growth that enables us to make investments in innovation to accelerate performance in each of our businesses.”
Segment details
Operational sales of consumer health products, barring the impact of acquisitions and divestitures, inched up 2.3% on the back of strong sales of Neutrogena, Aveeno and OGX beauty products.
More than 50% of the company’s revenue is generated from the pharmaceutical unit, which saw operational sales grow 4.4%, without considering the impact of acquisitions and divestitures. The company attributed the segment’s quarterly growth to strong sales of anti-inflammatory treatment Stelara as well as Imbruvica, an oral, once-daily therapy approved for use in treating certain B-cell malignancies.
Operational sales of medical devices, barring acquisitions and divestitures, jumped 3.2%, driven by growth of electrophysiology products in the Interventional Solutions business coupled with robust sales of endocutters and international energy products in the Advanced Surgery business.
Financial forecast
The world’s biggest maker of health care products projects 2019 sales to be between $80.8 billion and $81.6 billion, which is up from the previous forecaste of $80.8 billion to $81.6 billion. Johnson & Johnson is also guiding for earnings per share in the range of $8.53 to $8.63.
Disclosure: I do not hold any positions in the stocks mentioned.
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