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Johnson & Johnson’s (JNJ - Free Report) fourth-quarter 2022 earnings came in at $2.35 per share, which beat the Zacks Consensus Estimate of $2.22 as well as our estimate of $2.21 per share. Earnings rose 10.3% from the year-ago period.
Adjusted earnings exclude intangible amortization and some other special items. Including these items, J&J reported fourth-quarter earnings of $1.33 per share, down 24.9% from the year-ago quarter.
Sales of this drug and consumer products giant came in at $23.71 billion, slightly missing the Zacks Consensus Estimate of $23.76 billion. Sales declined 4.4% from the year-ago quarter, reflecting an operational increase of 0.9% and a negative currency impact of 5.3%. Sales, however, slightly beat our estimates of $23.57 billion.
Organically, excluding the impact of acquisitions and divestitures, sales rose 0.8% on an operational basis compared with an 8.2% increase in the previous quarter.
Fourth-quarter sales in the domestic market rose 2.9% to $12.52 billion. International sales declined 11.5% on a reported basis to $11.19 billion, reflecting an operational decline of 1.1%, plus a negative currency impact of 10.4%. Excluding the impact of all acquisitions and divestitures, on an adjusted operational basis, international sales declined 1% in the quarter.
Segment Details
Pharmaceutical segment sales declined 7.4% year over year to $13.16 billion, reflecting a 2.5% operational decline and a 4.9% negative currency impact. Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales declined 2.3%. Pharmaceutical segment sales exceeded our estimates of $12.8 billion as well as the Zacks Consensus Estimate of $13.04 billion.
Higher sales of key products, such as Darzalex and Stelara as well as relatively newer drugs, Erleada and Tremfya was offset by lower sales of J&J’s single-dose COVID-19 vaccine. The sales growth was also dampened by lower sales of key medicine, Imbruvica and generic/biosimilar competition to drugs like Zytiga and Remicade.
Darzalex sales rose 26.6% year over year to $2.08 billion in the quarter, which missed our estimates of $2.11 billion. Stelara sales grew 2.3% to $2.39 billion in the quarter. Stelara sales missed our estimate of $2.45 billion.
Imbruvica sales declined 18.5% to $866 million. Rising competitive pressure in the United States due to new oral competition has been hurting the sales of Imbruvica for the past few quarters. Imbruvica sales beat our estimates of $849.7 million.
Among the newer medicines, Erleada generated sales of $541 million in the quarter, up 40.9% year over year. Tremfya recorded sales of $752 million in the quarter, up 8.5% year over year.
PAH revenues of $870 million rose 2.3% year over year. Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales declined 2% to $1.0 billion in the quarter. Simponi/Simponi Aria sales declined 10.2% to $501 million, while Prezista sales decreased 4.3% to $493 million.
Xarelto sales rose 3.4% in the quarter to $667 million, while sales of Invokana/Invokamet declined 24.1% to $91.0 million.
Zytiga sales declined 50.8% to $270 million in the quarter due to generic competition. Sales of Remicade were down 37.8% in the quarter to $475 million.
J&J’s single-dose COVID-19 vaccine generated sales of $689 million in the fourth quarter, down 57.4% year over year. International sales accounted for all COVID-19 vaccine sales.
The MedTech segment sales came in at $6.78 billion, down 1.2% from the year-ago period, as an operational increase of 4.9% was offset by a negative currency movement of 6.1%. The MedTech segment sales missed our estimate of $7.06 billion as well as the Zacks Consensus Estimate of $6.97 billion.
Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 4.4%.
The Consumer Health segment recorded revenues of $3.77 billion in the reported quarter, up 1% year over year, reflecting a 6.4% operational increase and a 5.4% negative currency impact. Consumer Health segment sales came ahead of our estimate of $3.70 and the Zacks Consensus Estimate of $3.73 billion.
Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 6.4% worldwide.
J&J plans to separate its Consumer Health segment into a new publicly-traded company called Kenvue. The separation is expected to be executed this year.
2022 Results
Full-year 2022 sales rose 1.3% to $94.94 billion, missing the Zacks Consensus Estimate of $94.99 billion. Sales beat the guided range of $93.0 billion to $93.5 billion.
Adjusted earnings for 2022 were $10.15 per share, up 3.6% year over year. Sales beat the Zacks Consensus Estimate of $10.04 per share as well as the guided range of $10.02-$10.07 per share.
Issues 2023 Guidance
J&J expects to generate revenues in the range of $96.9 billion to $97.9 billion. This guidance excludes any revenues from J&J’s COVID-19 vaccine. The guidance range fell short of the Zacks Consensus Estimate of $98.18 billion. Revenue growth is expected in the range of 4.5% – 5.5%.
Excluding the COVID-19 vaccine, operational constant-currency sales are expected to increase in the range of 4.5%-5.5%. The adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth guidance is 3.5%-4.5%.
Adjusted earnings per share are expected in the range of $10.45 – $10.65. The Zacks Consensus Estimate is pegged at $10.22 per share.
The earnings range indicates an increase of 3%-5%. On an operational, constant-currency basis, adjusted earnings per share are expected to increase 2.5%-4.5%.
Our Take
J&J reported mixed fourth-quarter results as it beat estimates for earnings but missed the same for sales. Its Pharma unit, which is its biggest division, was the poorest performer in the quarter. Currency headwinds reduced its total sales by more than 5% in the quarter amid a strengthening U.S. dollar.
The company’s profit outlook for 2023 was above analyst expectations while the sales outlook was below estimates. J&J’s shares were down around 1% in pre-market trading. In the past year, J&J’s shares have risen 0.4% compared with the industry’s 14.9% increase.
Image Source: Zacks Investment Research
J&J and most other large drugmakers are facing several macroeconomic headwinds, including inflationary pressure and higher input costs, which, coupled with currency headwinds, are denting its profits. In this scenario, guiding an EPS range, which is ahead of analysts’ expectations sets a positive tone not just for the company but for the entire pharma sector as J&J is the first drugmaker to report fourth-quarter results.
Estimates for Sanofi’s 2022 earnings per share have increased from $4.13 per share to $4.31 while that for 2023 have jumped from $4.30 per share to $4.40 in the past 60 days. Sanofi’s stock has declined 5.4% in the past year.
Sanofi beat earnings expectations in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 9.50%, on average. Sanofi is scheduled to report its fourth-quarter results on Feb 3.
Estimates for Roche’s 2023 earnings per share have increased from $2.79 per share to $2.85. Shares of Roche have lost 14.8% in the year-to-date period. Roche is scheduled to report its fourth-quarter results on Feb 2.
In the past 90 days, estimates for Novo Nordisk’s earnings per share have increased from $3.26 per share to $3.38 per share while that for 2023 have increased from $4.00 per share to $4.15 per share. Shares of Novo Nordisk have risen 48.2% in the past year.
The earnings of Novo Nordisk missed estimates in one of the last four quarters and beat the mark in the other three, delivering an earnings surprise of 3.09%, on average.
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J&J (JNJ) Q4 Earnings Beat, Sales Miss, 2023 EPS View Upbeat
Johnson & Johnson’s (JNJ - Free Report) fourth-quarter 2022 earnings came in at $2.35 per share, which beat the Zacks Consensus Estimate of $2.22 as well as our estimate of $2.21 per share. Earnings rose 10.3% from the year-ago period.
Adjusted earnings exclude intangible amortization and some other special items. Including these items, J&J reported fourth-quarter earnings of $1.33 per share, down 24.9% from the year-ago quarter.
Sales of this drug and consumer products giant came in at $23.71 billion, slightly missing the Zacks Consensus Estimate of $23.76 billion. Sales declined 4.4% from the year-ago quarter, reflecting an operational increase of 0.9% and a negative currency impact of 5.3%. Sales, however, slightly beat our estimates of $23.57 billion.
Organically, excluding the impact of acquisitions and divestitures, sales rose 0.8% on an operational basis compared with an 8.2% increase in the previous quarter.
Fourth-quarter sales in the domestic market rose 2.9% to $12.52 billion. International sales declined 11.5% on a reported basis to $11.19 billion, reflecting an operational decline of 1.1%, plus a negative currency impact of 10.4%. Excluding the impact of all acquisitions and divestitures, on an adjusted operational basis, international sales declined 1% in the quarter.
Segment Details
Pharmaceutical segment sales declined 7.4% year over year to $13.16 billion, reflecting a 2.5% operational decline and a 4.9% negative currency impact. Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales declined 2.3%. Pharmaceutical segment sales exceeded our estimates of $12.8 billion as well as the Zacks Consensus Estimate of $13.04 billion.
Higher sales of key products, such as Darzalex and Stelara as well as relatively newer drugs, Erleada and Tremfya was offset by lower sales of J&J’s single-dose COVID-19 vaccine. The sales growth was also dampened by lower sales of key medicine, Imbruvica and generic/biosimilar competition to drugs like Zytiga and Remicade.
Darzalex sales rose 26.6% year over year to $2.08 billion in the quarter, which missed our estimates of $2.11 billion. Stelara sales grew 2.3% to $2.39 billion in the quarter. Stelara sales missed our estimate of $2.45 billion.
Imbruvica sales declined 18.5% to $866 million. Rising competitive pressure in the United States due to new oral competition has been hurting the sales of Imbruvica for the past few quarters. Imbruvica sales beat our estimates of $849.7 million.
Among the newer medicines, Erleada generated sales of $541 million in the quarter, up 40.9% year over year. Tremfya recorded sales of $752 million in the quarter, up 8.5% year over year.
PAH revenues of $870 million rose 2.3% year over year. Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales declined 2% to $1.0 billion in the quarter. Simponi/Simponi Aria sales declined 10.2% to $501 million, while Prezista sales decreased 4.3% to $493 million.
Xarelto sales rose 3.4% in the quarter to $667 million, while sales of Invokana/Invokamet declined 24.1% to $91.0 million.
Zytiga sales declined 50.8% to $270 million in the quarter due to generic competition. Sales of Remicade were down 37.8% in the quarter to $475 million.
J&J’s single-dose COVID-19 vaccine generated sales of $689 million in the fourth quarter, down 57.4% year over year. International sales accounted for all COVID-19 vaccine sales.
The MedTech segment sales came in at $6.78 billion, down 1.2% from the year-ago period, as an operational increase of 4.9% was offset by a negative currency movement of 6.1%. The MedTech segment sales missed our estimate of $7.06 billion as well as the Zacks Consensus Estimate of $6.97 billion.
Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 4.4%.
The Consumer Health segment recorded revenues of $3.77 billion in the reported quarter, up 1% year over year, reflecting a 6.4% operational increase and a 5.4% negative currency impact. Consumer Health segment sales came ahead of our estimate of $3.70 and the Zacks Consensus Estimate of $3.73 billion.
Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 6.4% worldwide.
J&J plans to separate its Consumer Health segment into a new publicly-traded company called Kenvue. The separation is expected to be executed this year.
2022 Results
Full-year 2022 sales rose 1.3% to $94.94 billion, missing the Zacks Consensus Estimate of $94.99 billion. Sales beat the guided range of $93.0 billion to $93.5 billion.
Adjusted earnings for 2022 were $10.15 per share, up 3.6% year over year. Sales beat the Zacks Consensus Estimate of $10.04 per share as well as the guided range of $10.02-$10.07 per share.
Issues 2023 Guidance
J&J expects to generate revenues in the range of $96.9 billion to $97.9 billion. This guidance excludes any revenues from J&J’s COVID-19 vaccine. The guidance range fell short of the Zacks Consensus Estimate of $98.18 billion. Revenue growth is expected in the range of 4.5% – 5.5%.
Excluding the COVID-19 vaccine, operational constant-currency sales are expected to increase in the range of 4.5%-5.5%. The adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth guidance is 3.5%-4.5%.
Adjusted earnings per share are expected in the range of $10.45 – $10.65. The Zacks Consensus Estimate is pegged at $10.22 per share.
The earnings range indicates an increase of 3%-5%. On an operational, constant-currency basis, adjusted earnings per share are expected to increase 2.5%-4.5%.
Our Take
J&J reported mixed fourth-quarter results as it beat estimates for earnings but missed the same for sales. Its Pharma unit, which is its biggest division, was the poorest performer in the quarter. Currency headwinds reduced its total sales by more than 5% in the quarter amid a strengthening U.S. dollar.
The company’s profit outlook for 2023 was above analyst expectations while the sales outlook was below estimates. J&J’s shares were down around 1% in pre-market trading. In the past year, J&J’s shares have risen 0.4% compared with the industry’s 14.9% increase.
Image Source: Zacks Investment Research
J&J and most other large drugmakers are facing several macroeconomic headwinds, including inflationary pressure and higher input costs, which, coupled with currency headwinds, are denting its profits. In this scenario, guiding an EPS range, which is ahead of analysts’ expectations sets a positive tone not just for the company but for the entire pharma sector as J&J is the first drugmaker to report fourth-quarter results.
Zacks Rank and Stocks to Consider
J&J currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Johnson & Johnson Price, Consensus and EPS Surprise
Johnson & Johnson price-consensus-eps-surprise-chart | Johnson & Johnson Quote
Some better-ranked biotech stocks include Sanofi (SNY - Free Report) , Roche (RHHBY - Free Report) and Novo Nordisk (NVO - Free Report) , all with a Zacks Rank of 2 (Buy).
Estimates for Sanofi’s 2022 earnings per share have increased from $4.13 per share to $4.31 while that for 2023 have jumped from $4.30 per share to $4.40 in the past 60 days. Sanofi’s stock has declined 5.4% in the past year.
Sanofi beat earnings expectations in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 9.50%, on average. Sanofi is scheduled to report its fourth-quarter results on Feb 3.
Estimates for Roche’s 2023 earnings per share have increased from $2.79 per share to $2.85. Shares of Roche have lost 14.8% in the year-to-date period. Roche is scheduled to report its fourth-quarter results on Feb 2.
In the past 90 days, estimates for Novo Nordisk’s earnings per share have increased from $3.26 per share to $3.38 per share while that for 2023 have increased from $4.00 per share to $4.15 per share. Shares of Novo Nordisk have risen 48.2% in the past year.
The earnings of Novo Nordisk missed estimates in one of the last four quarters and beat the mark in the other three, delivering an earnings surprise of 3.09%, on average.