Johnson & Johnson
Johnson & Johnson, the industrial pharmaceutical business, saw first-quarter sales rise 5% to $23.4 billion compared to the same quarter last year, missing analyst estimates. Net income for the group fell 17% to $5.15 billion.
The largest segment of the group, pharmaceutical sales, grew sales 6.3% y/y to $12.87 billion.
The medical devices business had sales increase 5.9% y/y to $6.97 billion, and surgeries are expected to rise above 2019 levels on demand from general and advanced surgery as well as orthopedics.
J&J’s consumer health business, which will be spun off into a separate listing by November 2023, had sales fall 1.5% to $3.59 billion. The consumer health segment was impacted, particularly in skin health and beauty, by supply issues for ingredients and packaging. J&J said the group faces economic headwinds from commodity supply constraints, and rising input costs from labour, energy, and transportation.
J&J shaved $1 billion off the full-year sales guidance it provided in January. The drugmaker is now forecasting full-year 2022 sales of between $94.8 billion and $95.8 billion - and earnings estimates per share were also adjusted lower to between $10.15 and $10.35, from a previous forecast of $10.40 to $10.60.
J&J will no longer provide Covid-19 vaccine revenue guidance. It felt reporting guidance for a single product to be out of the ordinary. Also making vaccine revenue forecasting tricky are the global vaccine supply surplus and uncertain demand for vaccines in the future. The company has so far sold $457 million of its Covid-19 vaccine globally, and said it never intended to make a profit from the vaccines anyway.
The board approved a 6.6% increase in the quarterly dividend, marking the 60th annual increase in dividends for the company - and making it one of the longest and most impressive track records in dividend growth stock history. We continue to hold J&J in the Cratos BCI Worldwide Flexible Fund as well as in managed client portfolios.