Johnson & Johnson posts strong results, raises guidance

Biotech and healthcare company, Johnson & Johnson (JNJ) posted 3Q18 results on Tuesday (16 October), with revenue standing at $20.35bn (+3% YoY) compared with $19.65bn posted in 3Q17, while diluted EPS came in at $2.05 vs $1.90 recorded in 3Q17. Thomson Reuters consensus forecasts had expected EPS of $2.03 on revenue of $20.5bn.

The slightly better-than-expected 3Q profit and the firm raising its full-year guidance was on the back of strong sales of its cancer drugs and immune disorder treatments, which powered strong results for its pharmaceutical unit. A turnaround in its baby care business also helped the firm outpace 3Q18 earnings and revenue estimates.

In terms of segments, JNJ’s pharmaceuticals business posted $10.35bn (+6.7% YoY) in revenue, beating Thomson Reuters consensus estimates of $10.02bn. Meanwhile, its medical device sales totaled $6.59bn (-0.2% YoY and missing expectations of $6.64bn), while the consumer business posted $3.42bn (+1.8% YoY) in sales – above the $3.34bn consensus forecasts had anticipated.

In the quarter under review, global sales of JNJ’s cancer drug Darzalex reached $498mn, missing analysts’ estimates of $510mn, while sales of Stelara, an immunotherapy treatment for plaque psoriasis, reached $1.31bn (+16.5% YoY), exceeding analysts’ expectations of $911mn. Prostate cancer drug, Zytiga sales surged 43% YoY to $958mn – significantly above the consensus estimate of $795mn. However, sales of its blockbuster arthritis drug Remicade fell 16.3% YoY to $1.38bn due to increasing competition from cheaper biosimilar versions.

Reuters reports that, according to the company, pricing pressure impacted all categories in orthopedics. JNJ added that “it will consider both transformative acquisitions and smaller, tuck-in deals to support the business.” The company has been selling off certain businesses (such as its diabetes care devices), to focus on better-performing units and the development of new products.

Looking ahead, for FY18, JNJ raised its earnings and revenue guidance saying that it now expects EPS to be between $8.13 and $8.18 (+9.3% to 10.0%), with revenue forecast to be in the range of $81.0bn to $81.4bn. Its previous guidance was for FY18 revenue of $80.5bn-$81.3bn.

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