Johnson & Johnson tops quarterly profit estimates as medical device sales jump

Johnson
&
Johnson
on
Tuesday

reported
first-quarter
adjusted
earnings
that
topped
Wall
Street’s
expectations
as
sales
in
its

medical
devices
business
surged.

Meanwhile,
the
company’s
total
revenue
for
the
period
was
largely
in
line
with
estimates.

J&J’s
medtech
division
provides
devices
for
surgeries,
orthopedics
and
vision.
The
company
is
benefiting
from
a rebound
in
demand for
nonurgent
surgeries
among
older
adults,
who
deferred
those
procedures
during the
Covid
pandemic.
That
increased
demand
has
been
observed
by
health
insurers
like Humana,


UnitedHealth
Group and Elevance
Health.

Here’s
what
J&J
reported
for
the

first
quarter
compared
with
what
Wall
Street
was
expecting,
based
on
a
survey
of
analysts
by
LSEG:

• 
  Earnings
  per
  share:
  $2.71
  adjusted
  vs.
  $2.64
  expected
• 
  Revenue:
  $21.38
  billion
  vs.
  $21.4
  billion
  expected

J&J’s
financial
results
are
considered
a
bellwether
for
the
broader
health
sector.

The
company
reported
$21.38
billion
in
total
sales
for
the
first
three
months
of
2024,
up
more
than
2%
from
the
same
quarter
in
2023. 

The
pharmaceutical
giant
booked
net
income
of
$5.35
billion,
or
$2.20
per
share
during
the
quarter.
That
compares
with
a

net
loss
of
$491
million,
or
19
cents
per
share,
for
the
year-earlier
period. At
the
time,
J&J
recorded
costs
tied
to
its
talc
baby
powder
liabilities
and
the
spinoff
of
its
consumer
health
unit


Kenvue. 

Excluding
certain
items
for
the
first
quarter
of
2024,
adjusted
earnings
per
share
were
$2.71.

J&J
also
narrowed
its
full-year
guidance
for
the
year.
The
company
now
expects
sales
of
$88
billion
to
$88.4
billion.
That
compares
to
a
previous
forecast
of
$87.8
billion
to
$88.6
billion. 

J&J
expects
adjusted
earnings
of
$10.57
to
$10.72
per
share.
That
compares
to
a
previous
guidance
of
$10.55
to
$10.75
per
share.

Separately
on
Tuesday,
J&J
said
it
will increase its
quarterly
dividend
to
$1.24
per
share,
up
4.2%
from
$1.19
per
share.
That
marks
the
company’s
62nd
year
of
consecutive
dividend
increases,
it
said.
The
dividend
is
payable
on
June
4.

The
results
come
weeks
after
J&J’s
whopping
$13.1
billion
acquisition
of
heart
device
firm


Shockwave
Medical
—
part
of
its
push
into
the
cardiovascular
space.
Both
companies
have
said
the
deal
will
make
J&J
a
leader
in
four
quickly
growing
cardiovascular
technology
categories. 

J&J
has
scooped
up
two
other
heart
device
companies
over
the
last
two
years,
spending
$16.6
billion
to
buy
Abiomed
and
$400
million
to
acquire
private
company
Laminar. 

Those
deals
also
aim
to
strengthen
J&J’s
medical
devices
business
following
the
company’s
separation
from
its
consumer
health
unit


Kenvue
last
year.

J&J’s
medical
devices
business
generated
sales
of
$7.82
billion
during
the
first
quarter,
up
more
than
4%
year
over
year.
Wall
Street
was
expecting
revenue
of
$7.87
billion,
according
to
estimates
compiled
by
StreetAccount.

J&J
said
its
acquisition
of
Abiomed
fueled
the
year-over-year
rise.
The
growth
also
came
from
electrophysiological
products,
which
evaluate
the
heart’s
electrical
system
and
help
doctors
understand
the
cause
of
abnormal
heart
rhythms,
according
to
J&J. 

Wound
closure
products
and
devices
for
orthopedic
trauma,
or
serious
injuries
of
the
skeletal
or
muscular
system,
contributed,
along
with
contact
lenses.

Meanwhile,
J&J
reported
$13.56
billion
in
pharmaceutical
sales,
marking
around
1%
year-over-year
growth.
Excluding
sales
of
its
unpopular
Covid
vaccine,
revenue
in
the
pharmaceutical
division
grew
almost
7%.

It
was
the
fourth
quarter
without
any
U.S.
sales
from
J&J’s
Covid
vaccine,
which
brought
in
$25
million
in
international
revenue.

Analysts
were
expecting
sales
of
$13.5
billion
for
the
business
segment,
according
to
StreetAccount.
The
business,
also
known
as “Innovative
Medicine,”
is
focused
on
developing
drugs
across
different
disease
areas.

The
company
said
the
growth
was
driven
by
sales
of
Darzalex,
a
biologic
for
the
treatment
of
multiple
myeloma,
and
Erleada,
a
prostate
cancer
treatment.
J&J’s
Carvykti,
a
cell
therapy
approved
for
a
certain
blood
cancer,
and
other
oncology
treatments
also
contributed
to
the
rise.

But
first-quarter
sales
of
the
company’s
blockbuster
drug
Stelara,
which
is
used
to
treat
several
chronic
and
potentially
disabling
conditions
such
as
Crohn’s
disease,
were
relatively
flat
from
the
same
period
a
year
ago.

Stelara
brought
in
$2.45
billion
in
sales
for
the
quarter.
Wall
Street
was
expecting
revenue
of
$2.61
billion.

J&J
began
to
lose
patent
protections
on
Stelara
late
last
year,
which
opened
up
the
door
for
cheaper
biosimilar
competitors
to
enter
the
market.
But
the
company
has
signed
settlement
agreements
with


Amgen
and
other
drugmakers
to
delay
the
launch
of
some
Stelara
copycats
to
2025.

J&J’s
first-quarter
results
come
amid
investor
anxiety
over
the
tens
of
thousands
of
lawsuits
claiming
that
the
company’s
talc-based
products
were
contaminated
with
the
carcinogen
asbestos
and
caused
ovarian
cancer
and
several
deaths.

Those
products,
which
include
J&J’s
namesake
baby
powder,
now
fall
under
Kenvue.
But
J&J
will
assume
all
talc-related
liabilities
that
arise
in
the
U.S.
and
Canada.

In
January,
J&J
said
it
has
reached
a

tentative
settlement
to
resolve
an

investigation
by
more
than
40
states
into
claims
the
company
misled
patients
about
the

safety
of
its
talc-based
products. The
company
will
pay
$700
million
to
settle
the
probe,
its
CFO
Joseph
Wolk

told
The
Wall
Street
Journal
at
the
time.

Last
year,
J&J
set
aside
about
$400
million
to
resolve
U.S.
state
consumer
protection
claims.

Notably,
the
settlement
does
not
resolve
the
lawsuits,
some
of
which
are
slated
to
go
to
trial
this
year. 

J&J
will
hold
an
earnings
call
with
investors
at
8:30
a.m.
ET
on
Tuesday.