Johnson & Johnson, a leading healthcare company, reported second-quarter revenue and adjusted earnings that surpassed Wall Street’s expectations. This impressive performance was driven by strong sales from the company’s medtech business, which offers surgical, orthopedic, and vision devices. The increased demand for non-urgent surgeries among older adults, who postponed these procedures during the COVID-19 pandemic, has been a significant factor in the medtech division’s success. Notably, health insurers like UnitedHealth Group and Elevance Health have also observed this surge in demand.
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Now let’s dive into the comparison between Johnson & Johnson’s results and Wall Street expectations for the quarter. Refinitiv conducted a survey of analysts, revealing that the company’s adjusted earnings per share were $2.80, exceeding the anticipated $2.62. Additionally, J&J’s revenue amounted to $25.53 billion, surpassing the expected $24.62 billion. Following this positive news, J&J’s stock experienced a 2% rise in premarket trading. However, it’s important to note that the stock has faced a decline of over 10% this year, leading to a market value of approximately $412 billion.
J&J’s sales during the quarter exhibited a growth of 6.3% compared to the same period last year, affirming the company’s status as a bellwether for the broader health sector. The pharmaceutical giant achieved a net income of $5.14 billion, translating to $1.96 per share. This marks an improvement from the net income of $4.8 billion, equivalent to $1.80 per share, recorded during the same period last year. Adjusted earnings per share, excluding certain items, amounted to $2.80 for this quarter.
As for its future outlook, J&J raised its full-year sales forecast to a range of $98.80 billion to $99.80 billion, surpassing its previous guidance. Furthermore, the company increased its adjusted earnings outlook for 2023 to $10.70 to $10.80 per share, up from the previous estimate of $10.60 to $10.70 per share.
Within J&J’s medtech business, sales for medical devices rose by 12.9% to $7.79 billion in the second quarter of 2022. Notably, the growth was attributed to electrophysiological products that evaluate the heart’s electrical system, as well as wound closure products and devices for orthopedic trauma. The acquisition of Abiomed, a cardiovascular medical technology company, in December further contributed to this growth.
Regarding J&J’s pharmaceutical sales, the company achieved $13.73 billion, indicating over a 3% year-over-year growth. Notably, sales of Darzalex, a biologic for multiple myeloma treatment, Erleada, a prostate cancer treatment, and the blockbuster drug Stelara, used for various immune-mediated inflammatory diseases, were key drivers. However, J&J will face patent expiration for Stelara later this year. The decline in sales of the arthritis drug Remicade, which faces competition from biosimilars, partially offset the growth.
It’s worth mentioning that this quarter marked the absence of U.S. sales from J&J’s COVID-19 vaccine, which received mixed reviews. Nonetheless, the vaccine generated $285 million in international revenue. Additionally, J&J’s consumer health business, now operating independently as Kenvue, achieved $4.01 billion in sales, reflecting a 5.4% increase compared to the previous year. Over-the-counter products such as Tylenol and Motrin, as well as Neutrogena’s skin health and beauty products, contributed significantly to this growth, particularly in international markets.
J&J’s quarterly results come amidst concerns from investors regarding the thousands of lawsuits claiming that the company’s talc-based products were contaminated with the carcinogen asbestos, leading to ovarian cancer and deaths. These products, including J&J’s baby powder, are now under the purview of Kenvue. However, J&J will assume all talc-related liabilities arising in the U.S. and Canada. To address these issues, J&J’s subsidiary LTL Management filed for bankruptcy in New Jersey, proposing a settlement of nearly $9 billion to resolve existing lawsuits and prevent new cases. J&J maintains its denial of the allegations and asserts that its talc-based products do not cause cancer.
Overall, Johnson & Johnson’s second-quarter results showcase its resilience and strength in the healthcare industry. With its medtech and pharmaceutical businesses driving growth, the company is well-positioned for a successful future.
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