JNJ Stock: The Surprising Source Of Johnson & Johnson’s First-Quarter Beat

Johnson & Johnson (JNJ) beat first-quarter expectations Tuesday in part thanks to its Covid vaccine, but JNJ stock skidded after the open.

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Although the company’s Covid shot has taken a back seat to vaccines from Pfizer (PFE) and Moderna (MRNA) in the U.S., it brought in $747 million in first-quarter sales for J&J. That beat expectations by $567 million and accounted for the majority of the $689 million beat in J&J’s pharmaceutical segment, SVB Securities analyst David Risinger said in a note to clients.

Covid vaccine sales aren’t sustainable, however, Edward Jones analyst John Boylan said in his note. That shouldn’t overshadow the solid performance across J&J’s entire business.

“Pharma sales excluding Covid-19 sales performed slightly better than our expectations, and it was encouraging to see key new products doing well,” Boylan said. “J&J’s medical-device business also performed better than our view due to new products, a recent acquisition and an improving post-Covid-19 hospital-operating environment.”

But in morning trading on today’s stock market, JNJ stock sank 2.7% near 161.30. Johnson & Johnson stock is consolidating with a buy point at 183.45, according to MarketSmith.com. Yet shares remained below their 200-day line at Monday’s close.

JNJ Stock: Consumer Health Outperforms

Overall, Johnson & Johnson earned an adjusted $2.68 per share on $24.75 billion in first-quarter sales. Earnings climbed a fraction while sales rose 5.6%. Both measures beat JNJ stock analysts’ forecast for a respective $2.51 and $23.61 billion, according to FactSet.

The biggest strength in the quarter was J&J’s consumer health business. Sales grew 7.4% on a strict, as-reported basis to $3.85 billion. Lee Brown, global sector lead for health care at research firm Third Bridge, noted strength from the over-the-counter business and skin/beauty products.

Meanwhile, total pharmaceutical sales rose 4.2% to $13.41 billion and medical technology sales grew 7.3% to $7.48 billion. Excluding the Covid vaccine sales, J&J’s drug division eked out a 2% gain. SVB’s Risinger noted immunology sales modestly missed forecasts, while oncology sales were mostly in line. Darzalex sales surged 22% to $2.26 billion, but lagged expectations.

J&J raised its outlook for the year and now expects adjusted earnings of $10.60 to $10.70 per share, well above forecasts for $10.51 a share. The company also calls for $97.9 billion to $98.9 billion in sales, while JNJ stock analysts predicted $97.57 billion for the top line this year.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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