Johnson & Johnson Shares Slip Following Mixed Earnings

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Johnson & Johnson (NYSE: JNJ) released its fiscal second-quarter earnings report before the markets opened on Tuesday. The company posted $1.83 in earnings per share (EPS) on $18.8 billion in revenue. The second quarter from last year had $1.74 in EPS and $18.48 billion in revenue. Thomson Reuters has consensus estimates calling for $1.80 in EPS and $18.95 billion in revenue.

Operational sales results increased 2.9% with a negative impact from currency of 1%. This included domestic sales increases of 1.6%, while international sales rose 2.3%, reflecting operational growth of 4.4% and a negative currency impact of 2.1%.

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Johnson & Johnson’s segments reported for the quarter:

  • Worldwide consumer sales of $3.5 billion for the second quarter represented an increase of 1.7% versus the prior year, consisting of an operational increase of 2.3% and a negative impact from currency of 0.6%.
  • Worldwide pharmaceutical sales of $8.6 billion for the second quarter represented a decrease of 0.2% versus the previous year with an operational increase of 1% and a negative impact from currency of 1.2%.
  • Worldwide medical devices sales of $6.7 billion for the second quarter 2017 represented a gain of 4.9% versus the prior year consisting of an operational increase of 5.9% and a negative currency impact of 1.0%.

During the quarter, New Brunswick, New Jersey-based Johnson & Johnson announced the completion of the acquisition of Actelion, a leading biopharmaceutical company, for about $30 billion in cash.

In terms of guidance for the full fiscal year, J&J expects its sales to come in a range of $75.8 billion to $76.1 billion up from the previous level. Additionally, the company raised its EPS guidance to a range of $7.12 to $7.22. The consensus estimates are calling for $7.10 in EPS and $75.67 billion in revenue.

Alex Gorsky, chairman and chief executive officer, commented:

Our second-quarter results reflect strong adjusted earnings growth and we are optimistic that the investments we are making will accelerate our sales growth in the second half of this year. Our pharmaceutical pipeline continued its strong momentum with the approval of TREMFYA as well as the submission and approval of several key line extensions. The Actelion acquisition establishes a new therapeutic area as well as another engine for growth.

Shares of J&J were last trading down about 0.6% at $131.35, with a consensus analyst price target of $133.67 and a 52-week range of $109.32 to $137.00.