Johnson & Johnson (NYSE: JNJ) reported better-than-expected earnings for the second quarter on Thursday and raised its full-year profit outlook.
The company reported adjusted earnings of $2.80 per share for the three months ending in June, marking an 8.1% increase compared to the last year. This surpassed the Street consensus forecast of $2.62 per share. In addition, JNJ revenues grew by 6.3% to reach $25.53 billion, exceeding estimates of $24.63 billion.
Pharmaceutical sales rose by 3.1% to $13.73 billion, while consumer health sales witnessed a 5.4% increase, reaching $4.01 billion. Medtech sales showed significant growth, jumping 12.9% to $7.78 billion.
Furthermore, Johnson & Johnson has raised its 2022 earnings forecast by around 5 cents per share. The updated projection now stands between $10.70 and $10.80 per share, up from the previous range of $10.60 to $10.70 per share. The company expects adjusted operational sales growth to be between $99.3 billion and $100.3 billion.
Moreover, the company maintained its quarterly dividend at $1.19 per share, demonstrating confidence in its financial standing.
“Our robust performance in the second quarter and the first half of 2023 is a testament to the hard work and commitment of our colleagues across the globe,” said CEO Joaquin Duato. “We are entering the back half of the year from a position of strength with numerous catalysts, including becoming a two-sector company focused on Pharmaceutical and MedTech innovation.”
Following the earnings release, Johnson & Johnson (JNJ) shares surged 5.95% in the opening hour of trading, reaching $168.16 each.
Lee Brown, Global research firm Third Bridge’s Global Sector Lead for Healthcare, applauded the Q2 performance, noting that some leading drugs performed below consensus estimates.
He further added: “While that could present some concern, the stronger performances by drugs that typically garner far less attention, as well as management’s demonstrated confidence in its second half projections, should be enough to keep investors comfortable, if not happy, with JNJ’s story.”
In April, Johnson & Johnson agreed to pay $8.9 billion to settle a class-action lawsuit related to allegations that its talc-based products, including Baby Powder, caused cancer.
In May, Johnson & Johnson spun off its consumer health division into a separate entity called Kenvue. Kenvue reported a 5.4% increase in sales to reach $4 billion over the three months ending in June. The company expects net sales to grow between 4.5% and 5.5% for the full year.
Johnson & Johnson plans to split-off Kenvue shares through an exchange offer, marking the next step in the separation, subject to market conditions.
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
