Johnson & Johnson Q2 Adj. EPS Beats View, Cuts FY24 Earnings Forecast

(RTTNews) - Johnson & Johnson reported Wednesday weak profit in its second quarter on charges, while adjusted earnings beat market estimates on sales growth. The drug major further trimmed its fiscal 2024 adjusted earnings outlook, but lifted operational sales view to mainly reflect the acquisition of Shockwave Medical.

In pre-market activity on the NYSE, Johnson & Johnson shares were losing around 0.5 percent to trade at $150.27.

Joaquin Duato, Chairman and Chief Executive Officer, said, "With a robust pipeline, upcoming regulatory milestones for RYBREVANT and TREMFYA, the integration of Shockwave, and continued expansion of newly launched products, including ACUVUE OASYS MAX 1-Day contact lenses and our VARIPULSE platform, we have a strong foundation for near and long-term growth."

For fiscal 2024, the company now expects adjusted earnings per share of $9.97 to $10.07, with a midpoint of $10.02. This represents a year-over-year growth of 0.5 percent to 1.5 percent.

The company previously expected adjusted earnings per share of $10.57 to $10.72, with a midpoint of $10.65, representing a year-over-year growth of 6.6 percent to 8.1 percent.

Adjusted operational earnings per share is now expected to be $10.00 to $10.10, with a midpoint of $10.05. This represents a year-over-year growth of 0.8 percent to 1.8 percent.

The company's previous estimate was for earnings per share of $10.60 to $10.75, with a midpoint of $10.68, and a year-over-year growth of 6.9 percent to 8.4 percent.

Analysts on average expect the company to earn $10.01 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

For the year, the company continues to expect sales at $88 billion to $88.4 billion, with a mid point at $88.2 billion. The outlook represents a growth of 4.7 percent to 5.2 percent.

Further, operational sales are now projected to be $89.2 billion to $89.6 billion, with a mid point of $89.4 billion. This is compared to previously expected $88.7 billion to $89.1 billion, with a mid point of $88.9 billion.

The revised operational sales outlook represents a growth of 6.1 percent to 6.6 percent, up from previously expected growth of 5.5 percent to 6 percent.

Adjusted operational sales growth is still expected to be 5.5 percent to 6.0 percent, with mid-point growth at 5.8 percent.

The Street is looking for sales of $88.74 billion for the year.

In fiscal 2023, adjusted income per share was $9.92 on sales of $85.159 billion.

In the second quarter, Johnson & Johnson's bottom line came in at $4.69 billion, down 12.8 percent from last year's $5.38 billion, due to one-time special charges. Earnings per share dropped 6 percent to $1.93 from $2.05 a year ago.

Adjusted earnings were $6.84 billion or $2.82 per share for the period, compared to $6.73 billion or $2.56 per share last year. Analysts had expected the company to earn $2.70 per share.

The company's reported sales for the quarter rose 4.3 percent to $22.45 billion from $21.52 billion last year. The Street was looking for sales of $22.31 billion for the quarter.

In the quarter, operational sales were up 6.6 percent, while adjusted Operational sales grew 6.5 percent. Adjusted operational growth excluding COVID-19 Vaccine was 7.1 percent.

U.S. sales grew 7.8 percent from last year to $12.57 billion, while International sales edged up 0.2 percent on a reported basis to $9.88 billion. Operational sales in the region was up 5.1 percent.

In the quarter, Innovative Medicine worldwide sales of $14.49 billion grew 5.5 percent on a reported basis, while operational sales growth was 7.8 percent. Innovative Medicine worldwide operational sales, excluding the COVID-19 Vaccine, grew 8.8 percent.

MedTech worldwide sales of $7.96 billion increased 2.2 percent on a reported basis and 4.4 percent on an operational basis.

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