Johnson & Johnson boosted revenue slightly and doubled its third-quarter profit, mainly due to a US$4 billion (NZD$6 billion) charge for litigation costs in the year-ago quarter. The health care giant blew past Wall Street expectations and raised its financial forecast for the year.
Meanwhile, the New Brunswick, New Jersey-based company disclosed overnight that it had to temporarily pause its huge, late-stage study of a potential Covid-19 vaccine “due to an unexplained illness in a study participant”. Such pauses are not unusual in big studies, and it's unknown whether the participant — one of 60,000 planned for the global study — got J&J's shot or a placebo.
The world’s biggest maker of health care products today reported net income of US$3.55 billion, or US$1.33 per share, up 103% from US$1.75 billion , or 66 cents (99c) per share, in 2019's third quarter.
Excluding one-time gains and expenses, adjusted net income was US$5.87 billion , or US$2.20 per share, up from US$5.67 billion , or or US$2.12 per share, a year earlier. Analysts surveyed by Zacks Investment Research were expecting US$1.99 per share.
Johnson & Johnson posted revenue of US$21.08 billion in the quarter. Analysts expected US$20.53 billion.
Despite the strong results, shares were down US$2.81, or 1.9 per cent, to US$149.03 in morning trading, likely a reaction to news of the vaccine study pause.
Amid the Covid-19 pandemic, J&J still managed to boost sales of its prescription drugs five per cent to US$11.42 billion, just over half its entire revenue. Sales were led by autoimmune disorder treatment Stelara, which brought in US$1.95 billion, up 15 per cent from a year ago.
Sales of consumer health products like Tylenol and BandAids edged up 1.3 per cent to US$3.51 billion.
But sales of medical devices and diagnostic equipment such as surgical tools and hip replacements fell 3.6 per cent to US$6.15 billion .
Sales of that equipment often indicates how busy hospitals are, and from the beginning of the pandemic, hospitals in hotspots cancelled scheduled surgeries and many patients postponed care and avoided hospitals for fear of catching the virus.
In a statement, Chief Executive Alex Gorsky said procedure recovery was better than expected. He also said the company is optimistic “for continued recovery in 2020 and strong momentum entering into 2021”.
J&J noted it completed its US$6.5 billion purchase of Momenta Pharmaceuticals on October 2. That deal is expected to help the company expand its position in creating drugs that treat autoimmune diseases in which the immune system attacks cells and body tissue, including common chronic disorders such as rheumatoid arthritis and colitis.
J&J said it expects adjusted full-year earnings in the range of US$7.95 to US$8.05 per share, up from its July forecast for US$7.75 to US$7.95. The company forecast revenue in the range of US$81.2 billion to US$82 billion, up from US$79.9 billion to US$81.4 billion.
Johnson & Johnson shares have risen four per cent since the beginning of the year, while the S&P 500 index has risen slightly more than nine per cent. The stock has climbed 18 per cent in the last 12 months.