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Johnson & Johnson reports robust quarter, but full-year earnings slip

(Sharecast News) - Johnson & Johnson reported robust growth in sales and earnings in its fourth quarter numbers on Tuesday, with sales rising 7.3% year-on-year to $21.4bn. Adjusted earnings per share for the quarter came in at $2.29, surpassing expectations by a narrow margin.

For the full year, Johnson & Johnson reported sales of $85.2bn, representing a 6.5% growth rate.

However, full-year earnings per share decreased to $5.20, mainly due to a one-time charge incurred in the first quarter.

Adjusted full-year earnings per share reached $9.92, making for an 11.1% increase.

"Johnson & Johnson's full year 2023 results reflect the breadth and competitiveness of our business and our relentless focus on delivering for patients," said chairman and chief executive officer Joaquin Duato.

"We have entered 2024 from a position of strength, and I am confident in our ability to lead the next wave of health innovation."

Looking ahead, Johnson & Johnson forecast sales between $87.8bn and $88.6bn for 2024, with adjusted earnings per share in the range of $10.55 to $10.75.

The company said its medical devices segment generated $7.67bn in sales, driven by factors including the acquisition of Abiomed and increased demand for electrophysiological products, wound closure products, orthopaedic trauma devices, and contact lenses.

It added that a rebound in demand for nonurgent surgeries among older adults also contributed to the segment's growth.

In the pharmaceutical division, J&J reported $13.72bn in sales, with notable contributions from drugs such as Darzalex, Erleada, and Stelara.

However, the company faced challenges with declining sales of Zytiga and Imbruvica.

J&J noted that it had also entered into agreements to delay the launch of biosimilar competitors for Stelara until 2025.

The company said it was set to begin price negotiations with the federal Medicare program for Stelara and Xarelto, following the Inflation Reduction Act passed by Joe Biden in 2022.

It warned that the negotiations were expected to impact drug prices in 2026.

Despite its positive financial performance, Johnson & Johnson was still grappling with lawsuits related to its talc-based products.

The company was set to assume talc-related liabilities in the US and Canada, CNBC reported, following the separation of its consumer health unit Kenvue.

A federal bankruptcy judge rejected the company's attempt to resolve the lawsuits in bankruptcy, with appeals pending.

At 0821 EST (1321 GMT), shares in Johnson & Johnson were down -0.09% in premarket trading at $162.33.

Reporting by Josh White for Sharecast.com.

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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