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Johnson & Johnson beats Q4 guidance

 

Johnson & Johnson beat earnings expectations in the last quarter of 2022, even as a strong US dollar and falling COVID-19 vaccine sales hurt earnings.

The healthcare giant also released a better-than-expected earnings forecast for 2023 on Tuesday. Overall, J&J said fourth-quarter earnings were down 26% to $3.52 billion, while revenue was down 4.4% to $23.71 billion.

Sales were hit by the strong US dollar, which is currently worth more than the euro. This can affect companies with large international businesses because they must convert those sales into dollars when reporting income.

J&J receives nearly half of its income from outside the US. The company’s international sales fell more than 11% in the quarter, but that decline was only 1% if you don’t factor in exchange rates.

J&J also did not record U.S. sales of its single dose COVID-19 vaccine for the quarter, which generated $689 million in international revenue. U.S. regulators severely limit who can get the J&J vaccine because of the rare risk of blood clots.

J&J sells prescription drugs and medical equipment. It spins off its consumer health products business, which includes well-known products such as BandAids.

Chairman and CEO Joaquín Duato said the unbundling should be completed this year.

Pharmaceuticals revenue, the company’s largest business, fell 7% to $13.16 billion in the fourth quarter, even as global sales of cancer drug Darzalex surged nearly 27% to over $2 billion.

Medical equipment sales fell 1% to about $6.8 billion.

J&J also generated $3.8 billion in consumer health sales.

The company recorded expenses this quarter related to ending production of a COVID-19 vaccine, isolating consumer health products, and completing its acquisition of cardiovascular technology company Abiomed, a deal announced in November.

Overall, fourth-quarter adjusted earnings were $2.35 per share. Analysts were expecting earnings of $2.23 per share on revenue of $23.9 billion, according to FactSet.

Last year, J&J earned about $17.9 billion on $94.9 billion in revenue. The company saw sales of 15 drugs top $1 billion. This includes Stelara for psoriasis and other inflammatory conditions, which has raised $9.7 billion.

The company expects its top seller to start losing US patent protection later this year, leading to cheaper competition.

For 2023, the company forecasts adjusted operating income of $10.40 to $10.60 per share. This range starts well above Wall Street’s expectations at $10.33 per share.

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