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Johnson & Johnson beats fourth-quarter earnings expectations

Prescription drug sales propelled Johnson & Johnson to another quarterly earnings beat, while sales of its signature baby products and other consumer goods showed slight improvement.

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The company also gave its financial forecast for this year that was close to what Wall Street is expecting.

J&J forecast 2019 earnings of between $8.50 and $8.65 per share and revenue in the range of $80.4 billion to $81.2 billion. Analysts previously said they expected earnings $8.60 per share and $82.69 billion in revenue, according to Refinitiv.

Shares of J&J rose about 1 percent Tuesday in premarket trading.

Here’s what the company reported during the last three months of 2018 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.97, adjusted, vs. $1.95 expected
  • Revenue: $20.4 billion vs. $20.2 billion expected

In the fourth quarter, Johnson & Johnson reported net income of $3.04 billion, or $1.12 per share, up from a loss of $10.7 billion, or a loss of $3.99 per share a year earlier due to amortization expenses and special items. Excluding an amortization expense of $1 billion and a net charge for special items of $1.4 billion, J&J earned $1.97 per share, above the $1.95 per share expected by analysts surveyed by Refinitiv.

Net sales rose 1 percent to $20.4 billion, above expectations of $20.2 billion. The company has now beaten consensus earnings estimates 21 quarters in a row and revenue 14 of the past 21 quarters.

Pharmaceutical sales continued to shine for J&J in the quarter. Sales reached $10.19 billion, surpassing the $9.99 billion analysts had expected.

J&J’s consumer business improved slightly, matching sales estimates of $3.55 billion in the quarter, a slight improvement from the $3.54 billion in revenue it generated during the same quarter in 2017.

Its medical device segment continued to struggle. Sales totaled $6.67 billion, short of the $6.68 billion Wall Street had anticipated and down more than 4 percent from $6.97 billion in the same period a year earlier.

J&J’s usually steady stock has been under pressure recently. A December report from Reuters said J&J knew for decades its talc baby powder contained asbestos. The company has repeatedly denied any wrongdoing and stands behind its namesake baby powder.

Since Reuters published its report, J&J shares have fallen by about 9.5 percent. Analysts called the selloff overdone, saying any litigation risk would cost less than the billions of dollars J&J lost in market cap.