Johnson & Johnson (NYSE:JNJ) stock rose 1.27% (As on July 21, 11:42:05 AM UTC-4, Source: Google Finance) after the company beats the earnings expectations for the second quarter of FY 23 and raises the guidance. JNJ has expressed optimism for strong growth this year, saying it expected to surpass profit estimates with joint replacement and other surgeries rebounding after COVID-19 and inflation tempering. Further, J&J that owns nearly 90% of Kenvue shares, plans to reduce its stake through an exchange offer that could launch “as early as the coming days”.
JNJ in the second quarter of FY 23 has reported the adjusted earnings per share of $2.80, beating the analysts’ estimates for the adjusted earnings per share of $2.62. The company had reported the adjusted revenue growth of 6.3 percent to $25.53 billion in the second quarter of FY 23. Quarterly sales of its multiple myeloma drug, Darzalex, also met Wall Street estimates at $2.43 billion, Refinitiv data showed. Second-quarter sales for the company’s medical device unit were $7.79 billion, topping estimates of $7.55 billion.
The volume of procedures such as hip and knee replacements and medical staffing levels needed to deliver them were expected to be “stable” for the rest of the year, J&J said after COVID-19 delayed surgeries and triggered healthcare worker shortages. J&J is trying to bolster growth at its pandemic-hit medical devices business while placing huge bets on its newer cancer drugs and seeking to counter a potential slowdown in sales of its Stelara arthritis drug when biosimilars hit as soon as 2025.
J&J now expects adjusted 2023 profit of $10.70 to $10.80 per share, above estimates of $10.65 per share and its prior forecast of $10.60 to $10.70 per share.
Meanwhile, J&J’s patent litigation settlement with Amgen over arthritis drug Stelara, which met expectations with sales of $2.8 billion in the second quarter, boosted confidence about hitting its target of $57 billion in pharmaceuticals sales by 2025. J&J has also settled with Alvotech and Teva Pharmaceutical over their version of Stelara, delaying any competition until 2025, with company executive Erik Haas telling investors no other biosimilars were expected before then.
In addition, J&J is facing more than 38,000 lawsuits alleging the products were contaminated by asbestos and caused cancer, claims it has denied. It is attempting to resolve the issue through an $8.9 billion settlement in bankruptcy court for the second time.