Johnson & Johnson Reports Strong Q3 Results, Raises Full-Year Guidance
Johnson & Johnson (J&J) announced its quarterly results on Tuesday, exceeding Wall Street’s expectations and raising its full-year guidance. The company’s pharmaceutical and medical devices businesses experienced significant sales growth, marking J&J’s first quarterly results since separating from its consumer health spinoff Kenvue in August.
Following the split, J&J initially lowered its full-year sales and profit guidance. However, the company raised its revised outlook, now expecting 2023 sales of $83.6 billion to $84 billion and adjusted earnings per share of $10.07 to $10.13. This update reflects the strong performance of J&J’s pharmaceutical and medical devices divisions.
Investors are now closely monitoring how J&J will fare as a standalone pharmaceutical and medical devices company. The company’s stock rose more than 1% in premarket trading on Tuesday. However, J&J shares have dropped nearly 11% for the year, resulting in a market value of approximately $379 billion.
J&J reported adjusted earnings per share of $2.66, surpassing the expected $2.52. The company’s revenue for the quarter amounted to $21.35 billion, beating the estimated $21.04 billion. Sales during the quarter grew by 6.8% compared to the same period last year.
In the pharmaceutical segment, J&J reported $13.89 billion in sales, a more than 5% increase year over year. Excluding its Covid vaccine sales, the company achieved $13.85 billion in revenue. The growth was driven by sales of Darzalex, Erleada, and other oncology treatments, as well as the blockbuster drug Stelara. However, sales of Zytiga and Imbruvica declined during the quarter.
J&J’s medical devices business also experienced growth, with sales reaching nearly $7.46 billion, a 10% increase from the third quarter of 2022. The acquisition of Abiomed, a cardiovascular medical technology company, contributed to this rise. Electrophysiological products, wound closure products, orthopedic trauma devices, and contact lenses all contributed to the overall growth.
However, J&J’s talc-related litigation remains a concern for investors. Thousands of lawsuits claim that the company’s talc-based products were contaminated with the carcinogen asbestos, leading to ovarian cancer and deaths. While these products are now under Kenvue, J&J will assume all talc-related liabilities in the U.S. and Canada.
In 2021, J&J transferred its talc liabilities to a subsidiary called LTL Management, along with filing for Chapter 11 bankruptcy protection. However, a federal bankruptcy judge rejected J&J’s attempt to resolve the lawsuits through bankruptcy. J&J is planning to appeal the decision.
Overall, J&J’s strong quarterly performance and revised full-year guidance reflect the company’s resilience and growth in the pharmaceutical and medical devices sectors. The conference call with investors is scheduled for 8:30 am ET to discuss these results.