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Johnson & Johnson (JNJ) earnings This fall 2023

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The inventory buying and selling graph of Johnson & Johnson is seen on a smartphone display.

Rafael Henrique | SOPA Photos | LightRocket | Getty Photos

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Johnson & Johnson on Tuesday reported fourth-quarter earnings and income that narrowly edged out Wall Road’s expectations as gross sales within the firm’s pharmaceutical and medical devices companies surged.

J&J additionally offered full-year guidance for 2024, forecasting gross sales of $87.8 billion to $88.6 billion and adjusted earnings of $10.55 to $10.75 per share. 

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Here is what J&J reported for the fourth quarter in contrast with what Wall Road was anticipating, based mostly on a survey of analysts by LSEG, previously generally known as Refinitiv:

  • Earnings per share: $2.29 adjusted vs. $2.28 anticipated
  • Income: $21.40 billion vs. $21.01 billion anticipated

J&J, whose monetary outcomes are thought of a bellwether for the broader well being sector, booked $21.40 billion in complete gross sales for the ultimate three months of 2023, up 7.3% from the identical quarter in 2022. 

The pharmaceutical big reported internet earnings of $4.13 billion, or $1.70 per share throughout the quarter. That compares with internet earnings of $3.23 billion, or $1.22 per share, for the year-ago interval. 

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Excluding sure objects, adjusted earnings per share had been $2.29 for the fourth-quarter of 2023.

The outcomes come six months after J&J completed its separation from its shopper well being unit Kenvue, the corporate’s greatest shake-up in its almost 140-year historical past. J&J is now zeroing in on its pharmaceutical and medical units divisions to drive development. 

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Section outcomes

J&J’s medical units enterprise generated gross sales of $7.67 billion, up 13.3% from the fourth quarter of 2022. Wall Road was anticipating income of $7.50 billion, in line with StreetAccount.

J&J mentioned its acquisition of Abiomed, a cardiovascular medical expertise firm, in December fueled the year-over-year rise.

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The corporate mentioned development additionally got here from electrophysiological merchandise, which consider the guts’s electrical system and assist docs perceive the reason for irregular coronary heart rhythms.

Wound closure merchandise and units for orthopedic trauma, or critical accidents of the skeletal or muscular system, contributed, together with contact lenses.

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J&J is benefiting from a rebound in demand for nonurgent surgical procedures amongst older adults, who deferred these procedures throughout the Covid pandemic. The corporate expects that top demand to “comply with by” in 2024, CFO Joseph Wolk mentioned on CNBC’s “Squawk Field” Tuesday.

In the meantime, J&J reported $13.72 billion in pharmaceutical gross sales, marking 4.2% 12 months over 12 months development. Excluding gross sales of its unpopular Covid vaccine, the pharmaceutical division raked in $13.68 billion. 

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It was the third quarter with none U.S. gross sales from J&J’s Covid vaccine, which introduced in $44 million in worldwide income.

Wall Road was anticipating gross sales of $13.44 billion for the enterprise section, in line with StreetAccount. The enterprise, often known as “Modern Drugs,” is concentrated on creating medication throughout totally different illness areas.

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J&J mentioned development within the division was pushed by gross sales of Darzalex, a biologic for the therapy of a number of myeloma, together with Erleada, a prostate most cancers therapy, and different oncology remedies. 

J&J’s blockbuster drug Stelara, which is used to deal with a number of power and probably disabling situations resembling Crohn’s disease, additionally contributed to development. J&J started to lose patent protections on Stelara late final 12 months, which opened up the door for cheaper biosimilar rivals to enter the market. However the firm has purchased itself extra time: J&J has inked settlement agreements with Amgen and different drugmakers to delay the launch of some Stelara copycats to 2025. 

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J&J mentioned development within the pharmaceutical section was partially offset by a decline in gross sales of its prostate most cancers drug Zytiga and blood most cancers drug Imbruvica, which is co-marketed by AbbVie. Each Imbruvica and Stelara shall be topic to the primary spherical of Medicare drug value negotiations below the Inflation Discount Act. 

Medicare negotiations

J&J will quickly start price talks with the federal Medicare program over Stelara in addition to blood thinner Xarelto.

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President Joe Biden‘s Inflation Discount Act, which handed in 2022, empowered Medicare to barter down drug costs for the primary time in this system’s six-decade historical past. J&J signed an settlement to take part within the value talks in October, even after it sued the Biden administration to halt the method in July.

The negotiated costs for the medication will go into impact in 2026.

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The fourth-quarter outcomes additionally come amid investor concern over the hundreds of lawsuits claiming that J&J’s talc-based merchandise had been contaminated with the carcinogenic asbestos and brought about ovarian most cancers and a number of other deaths.

These merchandise, together with J&J’s namesake child powder, now fall below Kenvue. However J&J will assume all talc-related liabilities that come up within the U.S. and Canada.

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In 2021, J&J offloaded its talc liabilities into a brand new subsidiary, LTL Administration, which instantly filed for Chapter 11 chapter safety. However a federal chapter choose in July rejected J&J’s second try to resolve these lawsuits in chapter. J&J has mentioned LTL Administration intends to attraction the choice.

J&J will maintain a convention name with buyers at 8:30 a.m. ET.

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