J&J beats Wall Street expectations for second-quarter earnings, boosts guidance

Shares of Johnson & Johnson rose 0.5% in premarket trade Tuesday after the company reported second-quarter earnings and revenue that soundly beat Wall Street expectations.

J&J’s JNJ, +0.31% profit JNJ, +0.31%for the latest quarter rose 42% to $5.607 billion, or $2.08 per share, from $3.954 billion, or $1.45 per share, a year ago, lifted by a pretax gain of $2 billion in the quarter from the sale of its Advanced Sterilization Products business to Fortive Corp. FTV, -0.69% 

Adjusted EPS was $2.58 per share. Analysts polled by FactSet were expecting EPS of $2.46 per share.

Revenue fell to $20.562 billion from $20.830 billion in the year-earlier quarter, but beat the FactSet consensus of $20.293 billion. Sales from J&J’s consumer business rose to $3.544 billion from $3.504 billion a year ago, while the company’s pharmaceuticals segment brought in $10.529 billion, up from $10.354 billion a year ago. Sales from the medical devices unit fell to $6.489 billion from $6.972 billion a year ago.

The company boosted its 2019 sales outlook to $80.8 billion to $81.6 billion from $80.4 billion to $81.2 billion. It also reaffirmed its full-year adjusted EPS of $8.53 to $8.63 per share.

Read: J&J earnings preview: Wall Street is still optimistic despite company’s legal issues and Johnson & Johnson stock dives 4.3% after Bloomberg reports that DOJ is pursuing criminal investigation into company

The positive earnings come as J&J goes to battle against the state of Oklahoma. The state filed suit against the company, saying its aggressive marketing practices contributed to the state’s widespread problem with opioid addiction and overdose. J&J’s main opioid products are the fentanyl patch Duragesic and Nucynta, a tapentadol pill it sold in 2015.

J&J has pushed back against accusations that it down-played addiction risk when marketing its opioid drugs. Closing arguments for the trial took place on Monday. The litigation could potentially cost J&J up to $17.5 billion dollars — the cost of a 30-year abatement plan the state presented to address the opioid problem.

The health-products giant, which makes a variety of health products, from mouthwash to cancer treatments like Zytiga, also faces thousands of lawsuits regarding the safety of its talc-based baby powder. Last year, a jury awarded $4.7 billion in damages to 22 women and their families who blamed their cases of ovarian cancer on asbestos in the company’s talc products, though the company is appealing the verdicts. In May, the company was ordered to pay $325 million to a woman who claimed its talc powder contributed to her diagnosis of mesothelioma, a rare, asbestos-linked cancer.

Shares of J&J have gained 4.4% in the year to date through Monday, while the Dow Jones Industrial Average DJIA, +0.10% has gained 17.3%. The S&P 500 SPX, +0.02% has gained 20.2%.

More on earnings: Health companies start reporting earnings next week: Here are 3 things to keep in mind

Also: UnitedHealth stock has bounced back after a rough first quarter. Will its positive streak continue?

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