J&J issues cautious 2023 forecast, shares fall

Johnson & Johnson (JNJ.N) raised the midpoint of its full-year earnings prediction by 10 cents on Tuesday, while topping first-quarter projections by 18 cents. Its shares dipped 2%.

J&J’s three businesses—pharmaceuticals, medical devices, and consumer—beat Wall Street projections in the first quarter.

J&J now expects to earn $10.60–$10.70 per share, up from $10.45–$10.65.

On a conference call, Chief Financial Officer Joseph Wolk called 2023 “responsibly optimistic” despite fierce competition for cancer treatment Imbruvica and inflation.

“EPS guidance was not raised by as much as the earnings upside we saw this quarter, but considering it is still early in the year, we view guidance as appropriately conservative,” said Edward Jones analyst John Boylan.

J&J expects a medical devices rebound and robust demand for Darzalex and other medications this year.

The business reported $24.7 billion in sales for the quarter, but a one-time expense linked to LTL Management’s second bankruptcy filing as it works to resolve more than 38,000 cancer cases against its talc products caused a net loss of $68 million. The company claims its goods are cancer-free.

The business announced a $6.9 billion bankruptcy charge earlier this month. J&J claimed the bankruptcy case would not affect its consumer health business.

Its COVID-19 vaccination and Crohn’s disease medication Stelara helped raise first-quarter pharmaceutical revenues.

Erleada sales of $542 million topped predictions of $500 million, and Stelara sales of $2.44 billion beat $2.41 billion. Darzalex met $2.26 billion.

The COVID vaccination that failed in the U.S. sold $747 million, surpassing analysts’ $50 million projections.

After hospital staffing shortages slowed medical procedures, the medical device unit reported $7.48 billion in sales, exceeding estimates of $7.31 billion.

Consumer health sales grew 7.4% to $3.85 billion, beating predictions of $3.62 billion. Price hikes countered inflation.

Refinitiv data showed adjusted first-quarter earnings of $2.68 per share, exceeding predictions of $2.50.