Johnson & Johnson beat market expectations for first-quarter revenue and earnings.
The pharmaceutical company reported adjusted earnings per share of $2.68 in the first quarter of 2023, up from $2.67 in the same period last year.
Quarterly revenue reached $24.75 billion, an increase of 5.6 percent from last year.
Analysts had expected Johnson & Johnson (ticker: JNJ ) to post earnings of $2.60 per share for the first quarter on sales of $23.6 billion, according to FactSet.
“Our first quarter results reflect strong performance across all three business units,” CEO Joaquin Duato said in a statement. “At this pace, I look forward to the remainder of the year filled with exciting initiatives that will create immediate and long-term value for patients and all stakeholders.”
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The company raised its full-year adjusted earnings expectations to $10.60-$10.70 per share, up from $10.45-$10.65 previously. It raised its full-year sales forecast to $97.9 billion to $98.9 billion from $96.9 billion to $97.9 billion.
It rose 2.2 percent to $169.34 in premarket trading on Tuesday.
The company reported a quarterly dividend increase of 5.3% to $1.19. The suggested dividend is $4.76 per share for the year, compared to $4.52 last year.
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This is breaking news. Read Johnson & Johnson’s earnings preview below and check back soon for more analysis.
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As Johnson & Johnson reports earnings Tuesday morning, one big question will be on investors’ minds: What’s going on with its plan to spin off its consumer-health business into a separate company?
Johnson & Johnson is the last of the large chain of pharmacies. Such as Eli Lilly ( Lilly ), Pfizer ( PFE ) and GSK ( GSK
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) Johnson & Johnson ditched all but its core biopharma businesses and stuck with the old model, combining a large consumer-health business, a large medical-devices division, and a biopharma business.
That is expected to end this year when Johnson & Johnson spins off its consumer health division, which sells Tylenol and Band-Aids. The new, publicly traded company is called Kenvu.
The timing of Johnson & Johnson’s split is unclear. And now, legal issues have raised some questions about the plan.
The controversy over claims that talc in the company’s baby powder products caused cancer has brought it back into focus. Although Johnson & Johnson announced an $8.9 billion settlement earlier this month, it’s unclear whether the dispute is over.
The company’s earnings will be released Tuesday morning, and a call with investors to tune in at 8:30 a.m. ET may bring news of Kenvu’s breakup and litigation. Investors are also looking for improvements in anti-inflammatory drug Stelara, which is expected to face biosimilar competition later this year.
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Johnson & Johnson’s stock has bested the market in 2022, rising 3.3 percent, while the S&P 500 is down 19 percent, but has performed well this year. In the year The stock is down 6.2 percent in 2023, while the S&P 500 is up 7.9 percent.
Johnson & Johnson reports quarterly earnings before its big pharma peers, so the results are often seen as a bellwether for the sector. Investors are looking for a reason to return to stocks: the
S&P 500 Pharmaceuticals
The industrial group is down 3.9% this year, but
The Healthcare Select Sector SPDR Exchange Traded Fund ( XLV ) fell 1.1 percent.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
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