Why Johnson & Johnson (NYSE: JNJ) stock is rising

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Johnson & Johnson (NYSE: JNJ) stock rose over 4% on 17 Jul (as of 10:51 AM GMT-4; Source: google finance) after the company posted better than expected results driven by higher sales of rare-disease treatments from its acquisition of Actelion and cancer drugs Zytiga and Darzalex. The second quarter results shows the double-digit growth in the Pharmaceutical business and the accelerating sales momentum in the Medical Devices business, due to the continued growth of the market leading products and strategic new launches. The company is focused on investing in innovation and meeting the needs of our customers by delivering innovative products and solutions that position the company to deliver long-term, sustainable growth. In the second quarter, Pharmaceutical business posted $10.4 billion in revenue, a 20 percent year-over-year increase that topped expectations of $9.95 billion, according to consensus estimates from StreetAccount. Excluding the net impact of acquisitions and divestitures, worldwide sales rose 17.6 percent. The worldwide sales of oncology drugs reached $2.46 billion, which is an increase of 42.2 percent, or 38.7 percent when excluding currency, from the year-ago quarter.

Moreover, Darzalex, a multiple myeloma treatment, worldwide revenue grew nearly 80 percent to $511 million, up from $299 million in the year-ago quarter and above analysts’ expectations of $465.7 million. When excluding currency, the revenue rose 68 percent. JNJ’s medical device unit grew 3.7 percent on an operational basis from last year, reaching $7 billion and topping Street estimates of $6.90 billion. Excluding the net impact of acquisitions and divestitures, worldwide sales increased 1.9 percent.

JNJ in the second quarter of FY 18 has reported the adjusted earnings per share of $2.10, beating the analysts’ estimates for the adjusted earnings per share of $2.07. The company had reported the adjusted revenue growth of 11 percent to $20.83 billion in the second quarter of FY 18, beating the analysts’ estimates for revenue of $20.39 billion. On an operational basis, JNJ’s revenue grew 8.7 percent. Excluding the impact of acquisitions, divestitures and currency, worldwide sales grew up 6.3 percent.

For the full year 2018, JNJ expects earnings in the range of $8.07 to $8.17 per share, representing operational growth between 8.5 percent and 9.9 percent. The sales for the full year expected to be in the range of $80.5 billion to $81.3 billion. The company was previously expecting revenue in the range of given $81 billion and $81.8 billion. This reflects growth between 4.5 and 5.5 percent when excluding currency.

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