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Johnson & Johnson Thursday mentioned Second-quarter revenue and adjusted earnings beat Wall Street expectations, and raised its guidance for the full year as sales from the company Medtec Business jump.
The Medtech department provides devices for surgeries, orthopedics and vision. The company is benefiting from a rebound in demand for non-urgent surgeries among seniors, who have postponed those procedures during the pandemic.
This increased demand has been noticed by health insurance companies such as United Health Group health and fitness.
Here’s how J&J works results Compared to Wall Street expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: Adjusted $2.80, vs. $2.62 expected
- he won: 25.53 billion dollars, compared to the expected 24.62 billion dollars
J&J shares were up nearly 5% in morning trade Thursday. The stock is down more than 5% for the year, which puts the company’s market capitalization at about $433 billion.
J&J, whose financial results are a leader in the broader health sector, said its sales for the quarter grew 6.3% year-over-year.
The pharmaceutical giant reported net income of $5.14 billion, or $1.96 per share. That compares with net income of $4.8 billion, or $1.80 per share, for same period a year ago.
Excluding certain items, adjusted earnings per share were $2.80 for the period.
J&J now expects full-year sales of $98.80 billion to $99.80 billion, about $1 billion higher than guidance provided in April.
The company raised its adjusted earnings forecast for 2023 to $10.70 to $10.80 per share, from a previous forecast of $10.60 to $10.70 per share.
The full-year guidance includes results from J&J’s consumer health business, which spun off as a standalone company under the Kenvue name in early May.
J&J owns approximately 90% of Kenvue and plans to reduce its stake with an exchange offering that could be launched “in the coming days,” J&J CFO Joseph Wolk said during the earnings call.
This process will allow J&J shareholders to exchange all or a portion of their shares for common shares in Kenvue.
In this illustration, Johnson & Johnson’s stock trading chart is shown on a smartphone screen.
Rafael Henrique | SOPA Pictures | Light Rocket | Getty Images
Sales of the company’s medical device business increased to $7.79 billion, an increase of 12.9% from the second quarter of 2022.
J&J said the growth has come from electrophysiological products, which assess the heart’s electrical system and help doctors understand the cause of an irregular heartbeat. Wound closure products and devices have also contributed to orthopedic injuries or serious injuries to the skeletal or muscular system.
J&J said its acquisition of Abiomed, a cardiovascular medical technology company, in December helped fuel that growth.
“These strong results continue to demonstrate that our efforts have been able to improve the growth of the medtech business,” J&J CEO Joaquin Duato said during the earnings call.
During the call, Wolk added that the recently launched medtech products are an “important factor” driving the higher growth trajectory of the business.
pharmaceutical business
J&J reported $13.73 billion in pharmaceutical sales, growing more than 3% year-over-year. Excluding sales of the unpopular Covid vaccine, the drug division took in $13.45 billion.
The work focuses on drug development in different disease areas.
The company said the growth was driven by sales of Darzalex, a biologic drug for multiple myeloma, Erleada, a prostate cancer treatment, and blockbuster drug Stelara, which is used to treat a number of immune-mediated inflammatory diseases.
J&J will lose patent protection on Stelara later this year.
The growth was partially offset by lower sales of the arthritis drug Remicade, which faces competition from biosimilars, or lower-cost drugs that are roughly similar in structure.
This quarter was the first without any US sales of J&J’s Covid vaccine, which generated $285 million in international revenue.
In April, the company said so It does not expect any domestic revenues beyond what it reported during the first quarter because its obligations under government contracts are complete.
J&J’s pharmaceutical pipeline is “progressing well,” Duatu said.
He highlighted experimental drugs such as Milvexianan oral treatment intended to prevent blood clots, which is slowly moving toward approval by the Food and Drug Administration.
Strong pharma results and potential upcoming drug launches make J&J “very confident” it can meet the division’s 2025 annual sales goal of $57 billion, Duatu said.
Kenvue results, talc talc
J&J said its consumer health segment generated $4.01 billion in sales for the quarter, up 5.4% from the same period last year.
This growth came mainly from over-the-counter products such as Tylenol, Motrin pain reliever and upper respiratory products. Neutrogena brand skin health and beauty products contributed to the growth in international sales.
Kenvue reported to her Thursday’s first quarterly results.
J&J’s quarterly results come amid investor concern over thousands of lawsuits alleging the company’s talc-based products were contaminated with the carcinogen asbestos, which has caused ovarian cancer and several deaths.
These products, like J&J’s namesake baby powder, now fall under Kenvue. But J&J will assume all liabilities relating to those arising in the United States and Canada.
In April, J&J subsidiary LTL Management filed for bankruptcy in New Jersey, proposing to pay nearly $9 billion to settle more than 38,000 lawsuits and prevent new cases from being filed.
It is the company’s second attempt to resolve its talc claims in bankruptcy court after a previous attempt was rejected by a federal appeals court.
Most litigation was halted during the bankruptcy proceedings. But the bankruptcy court allowed a trial to take place in Oakland, California.
On Tuesday, the jury decided that J&J Paying $18.8 million To a man who said he got cancer from exposure to baby powder.
J&J vice president of litigation Eric Haas said during the earnings call that the company plans to appeal the ruling. He called it “irreconcilable with decades of independent scientific assessments that Johnson & Johnson’s Baby Powder is safe, does not contain asbestos, and does not cause cancer.”
Haas added that J&J will not pay the judgment’s decision while bankruptcy proceedings are ongoing, and “the decision has no bearing on that process.”
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