Profits for the fiscal fourth quarter for Johnson & Johnson beat market expectations but the company’s revenue in the same period missed market expectations by a small margin, the company announced on Wednesday.
J&J reported adjusted earnings per share of $1.88 compared to analysts’ expectations of $1.87 per share in the fourth quarter according to data available from Refinitiv. The revenues of the company came in at $20.74 billion for the same quarter compared to market expectations of $20.8 billion.
The stocks of the company gained 1 per cent prior to the publication of the earnings report but later dropped by almost 1.3 per cent in pre-market trading following the publication of the results.
“We delivered strong underlying sales and earnings growth in 2019, driven by the strength of our pharmaceutical business, accelerating performance in our medical devices business and improved profitability in our consumer business,” J&J Chairman and CEO Alex Gorsky said in a press release.
A 3.5 per cent year on year growth in revenues generated by the pharmaceutical business at $10.54 billion was reported by the company for the fourth quarter. On the other hand, there was 0.9 per cent year on year growth in the revenues from the consumer products business of J&J which came in at $3.5 billion. This business makes beauty products such as Neutrogena. There was however a drop of half a percent from last year in revenues generated in the quarter by the medical device unit of the company.
There are numerous lawsuits related to a range of issues – from claims about the company’s talc-based baby powder is the cause of cancer to allegations that it helped fuel that nationwide opioid epidemic, being faced by J&J. The company is the manufacturer of popular consumer product brands like Tylenol and Aveeno.
The company however reported a dramatic drop in its litigation expenses for the fourth quarter at $264 million in comparison to the expenses of $1.29 billion in the same quarter a year ago.
There has been a growth of more than 2 per cent in the share price of J&J so far this year despite the litigation. In comparison the wider S&P 500 index has grown by almost 3 per cent in the same period.
There was a 5.4 per cent year on year increase in the fourth quarter in the sales of J&J’s rheumatoid arthritis drug Remicade to reach $3.5 billion while the company reported a 9.1 per cent growth in the sales of its multiple myeloma drug Darzalex to reach $2.7 billion. There was a stupendous 42.1 per cent growth in the quarter in the sale of the company’s cancer drug Imbruvica increased at $830 million while it reported a 6.6 per cent growth in sale of Stelara at $515 million.
The company forecast earnings for 2020 to be between $8.95 per share and $9.10 a share against expected revenue being in the range of $85.4 billion and $86.2 billion.
(Adapted from CNBC.com)