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Johnson & Johnson’s (JNJ - Free Report) fourth-quarter 2023 earnings came in at $2.29 per share, which beat the Zacks Consensus Estimate of $2.27. Earnings rose 11.7% 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 $1.70 per share, up 39.3% from the year-ago quarter.
Sales of this drug and medical devices giant came in at $21.4 billion, beating the Zacks Consensus Estimate of $21.1 billion by a slight margin. Sales rose 7.3% from the year-ago quarter, reflecting an operational increase of 7.2% and a positive currency impact of 0.1%. Organically, excluding the impact of acquisitions/divestitures and currency, sales rose 5.7% on an operational basis.
Fourth-quarter sales in the domestic market rose 11% to $12.0 billion. Excluding the impact of all acquisitions and divestitures, on an adjusted operational basis, domestic sales rose 8.8% in the quarter.
International sales rose 2.9% on a reported basis to $9.39 billion, reflecting an operational increase of 2.7% and a positive currency impact of 0.2%. Excluding the impact of all acquisitions and divestitures, on an adjusted operational basis, international sales rose 2.1% in the quarter.
Segment Details
Sales in J&J’s Innovative Medicines segment (previously the Pharmaceutical segment) rose 4.2% year over year to $13.72 billion, reflecting a 4% operational increase and a 0.2% positive currency impact. Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 4%. Innovative Medicines sales beat the Zacks Consensus Estimate of $13.41 billion and our model estimate of $13.1 billion.
Higher sales of key products such as Darzalex, Stelara, Tremfya and Erleada drove the segment’s growth. New drugs like Carvykti and Spravato also contributed to growth. The sales growth was partially dampened by lower sales of Imbruvica, COVID vaccine and generic/biosimilar competition to drugs like Zytiga and Remicade.
Sales of multiple myeloma medicine Darzalex rose 22.4% year over year to $2.55 billion in the quarter. Sales slightly beat the Zacks Consensus Estimate of $2.50 billion and our model estimate of $2.47 billion. Blockbuster psoriasis drug, Stelara sales grew 15.3% to $2.75 billion in the quarter. Stelara sales beat the Zacks Consensus Estimate of $2.56 billion and our model estimate of $2.49 billion.
Imbruvica sales declined 8.9% to $788.0 million. Rising competitive pressure in the United States due to new oral competition has been hurting sales of Imbruvica for the past few quarters. Imbruvica sales were, however, better than the Zacks Consensus Estimate of $740.0 million and our estimate of $686.6 million.
Erleada generated sales of $647 million in the quarter, up 19.8% year over year. Erleada sales missed the Zacks Consensus Estimate of $720 million as well as our model estimate of $660.9 million. Tremfya recorded sales of $910 million in the quarter, up 21% year over year. Tremfya sales beat the Zacks Consensus Estimate of $885.0 million as well as our model estimate of $868.0 million.
New drug Carvykti, a BCMA CAR-T therapy approved for relapsed or refractory multiple myeloma, recorded sales of $159 million compared with $152 million in the previous quarter. Another new drug Spravato, approved for treatment-resistant depression, recorded sales of $206.0 million compared with $183.0 million in the previous quarter.
Pulmonary arterial hypertension drug Uptravi recorded sales of $419.0 million, rising 24.6% year over year. Xarelto sales declined 21.2% in the quarter to $625 million.
MedTech segment sales came in at $7.67 billion, up 13.3% from the year-ago period, as an operational increase of 13.4% was offset by a negative currency movement of 0.1%. MedTech segment sales beat the Zacks Consensus Estimate of $7.48 billion as well as our model estimate of $7.56 billion.
Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 9.1%.
2023 Results
Full-year 2023 sales rose 6.5% to $85.2 billion, beating the Zacks Consensus Estimate of $84.87 billion.
Adjusted earnings for 2023 were $9.92 per share, up 11.1% year over year. Earnings beat the Zacks Consensus Estimate of $9.90 per share.
2024 Outlook
J&J maintained its sales and earnings growth expectations for 2024, which it had announced in December.
In 2024, J&J expects total revenues in the range of $87.8 billion-$88.6 billion, which indicates growth in the range of 4.5%-5.5% driven by both its Innovative Medicine and MedTech segments. Operational sales growth is expected in the range of 5%-6%, the same as announced on the December guidance call.
Adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth is now expected to be in the range of 5%-6%. All revenue figures exclude any revenues from COVID-19 vaccine sales.
Adjusted earnings per share are expected in the range of $10.55-$10.75. The earnings range implies growth in the range of 6.4%-8.4%.
On an operational, constant-currency basis, adjusted earnings per share are expected to increase in the range of 6.4%-8.4%.
Our Take
J&J reported strong fourth-quarter results, beating estimates for earnings as well as sales. Its Innovative Medicines unit outperformed expectations, with sales of several key drugs like Darzalex, Stelara, Tremfya and Imbruvica beating estimates. J&J re-confirmed its full-year adjusted earnings and sales growth guidance that it had issued in December.
Despite the earnings beat, J&J’s shares were down 1.4% in pre-market trading. In the past year, J&J’s shares have declined 3.5% against the industry’s 17.2% increase.
Image Source: Zacks Investment Research
In August, J&J completely separated its Consumer Health business into a newly listed company called Kenvue (KVUE - Free Report) , which now operates as a separate and fully independent company.
After completion of the exchange offer, J&J now has a 9.5% stake (approximately 180 million shares) in Kenvue’s common stock, which it may monetize in a tax-efficient manner in 2024.
With the complete separation of the Consumer Health segment, J&J has now become a two-sector company focused on the Pharmaceutical and MedTech fields.
J&J’s Innovative Medicines unit is performing at above-market levels. Growth is being driven by key products like Darzalex, Stelara, Tremfya, Erleada and Uptravi, and also continued uptake from new launches, including Spravato, Carvykti and Tecvayli. The MedTech unit is showing improving trends, driven by a post-pandemic recovery in surgical procedures and contribution from new products.
In the past 60 days, estimates for Regeneron’s 2024 earnings have risen from $41.57 per share to $43.97 per share. Regeneron’s stock has surged 29.5% in the past year.
Regeneron beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 12.34%.
Estimates for Novo Nordisk’s 2024 earnings per share have increased from $3.15 to $3.29 over the past 60 days. NVO’s stock has surged 51.3% in the past year.
Earnings of Novo Nordisk beat estimates in two of the last four quarters, missed in one and matched estimates in one, delivering an earnings surprise of 0.58% on average.
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J&J's (JNJ) Q4 Earnings Beat, Darzalex, Stelara Drive Sales
Johnson & Johnson’s (JNJ - Free Report) fourth-quarter 2023 earnings came in at $2.29 per share, which beat the Zacks Consensus Estimate of $2.27. Earnings rose 11.7% 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 $1.70 per share, up 39.3% from the year-ago quarter.
Sales of this drug and medical devices giant came in at $21.4 billion, beating the Zacks Consensus Estimate of $21.1 billion by a slight margin. Sales rose 7.3% from the year-ago quarter, reflecting an operational increase of 7.2% and a positive currency impact of 0.1%. Organically, excluding the impact of acquisitions/divestitures and currency, sales rose 5.7% on an operational basis.
Fourth-quarter sales in the domestic market rose 11% to $12.0 billion. Excluding the impact of all acquisitions and divestitures, on an adjusted operational basis, domestic sales rose 8.8% in the quarter.
International sales rose 2.9% on a reported basis to $9.39 billion, reflecting an operational increase of 2.7% and a positive currency impact of 0.2%. Excluding the impact of all acquisitions and divestitures, on an adjusted operational basis, international sales rose 2.1% in the quarter.
Segment Details
Sales in J&J’s Innovative Medicines segment (previously the Pharmaceutical segment) rose 4.2% year over year to $13.72 billion, reflecting a 4% operational increase and a 0.2% positive currency impact. Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 4%. Innovative Medicines sales beat the Zacks Consensus Estimate of $13.41 billion and our model estimate of $13.1 billion.
Higher sales of key products such as Darzalex, Stelara, Tremfya and Erleada drove the segment’s growth. New drugs like Carvykti and Spravato also contributed to growth. The sales growth was partially dampened by lower sales of Imbruvica, COVID vaccine and generic/biosimilar competition to drugs like Zytiga and Remicade.
Sales of multiple myeloma medicine Darzalex rose 22.4% year over year to $2.55 billion in the quarter. Sales slightly beat the Zacks Consensus Estimate of $2.50 billion and our model estimate of $2.47 billion. Blockbuster psoriasis drug, Stelara sales grew 15.3% to $2.75 billion in the quarter. Stelara sales beat the Zacks Consensus Estimate of $2.56 billion and our model estimate of $2.49 billion.
Imbruvica sales declined 8.9% to $788.0 million. Rising competitive pressure in the United States due to new oral competition has been hurting sales of Imbruvica for the past few quarters. Imbruvica sales were, however, better than the Zacks Consensus Estimate of $740.0 million and our estimate of $686.6 million.
Erleada generated sales of $647 million in the quarter, up 19.8% year over year. Erleada sales missed the Zacks Consensus Estimate of $720 million as well as our model estimate of $660.9 million. Tremfya recorded sales of $910 million in the quarter, up 21% year over year. Tremfya sales beat the Zacks Consensus Estimate of $885.0 million as well as our model estimate of $868.0 million.
New drug Carvykti, a BCMA CAR-T therapy approved for relapsed or refractory multiple myeloma, recorded sales of $159 million compared with $152 million in the previous quarter. Another new drug Spravato, approved for treatment-resistant depression, recorded sales of $206.0 million compared with $183.0 million in the previous quarter.
Pulmonary arterial hypertension drug Uptravi recorded sales of $419.0 million, rising 24.6% year over year. Xarelto sales declined 21.2% in the quarter to $625 million.
MedTech segment sales came in at $7.67 billion, up 13.3% from the year-ago period, as an operational increase of 13.4% was offset by a negative currency movement of 0.1%. MedTech segment sales beat the Zacks Consensus Estimate of $7.48 billion as well as our model estimate of $7.56 billion.
Excluding the impact of all acquisitions and divestitures and currency, on an adjusted operational basis, worldwide sales rose 9.1%.
2023 Results
Full-year 2023 sales rose 6.5% to $85.2 billion, beating the Zacks Consensus Estimate of $84.87 billion.
Adjusted earnings for 2023 were $9.92 per share, up 11.1% year over year. Earnings beat the Zacks Consensus Estimate of $9.90 per share.
2024 Outlook
J&J maintained its sales and earnings growth expectations for 2024, which it had announced in December.
In 2024, J&J expects total revenues in the range of $87.8 billion-$88.6 billion, which indicates growth in the range of 4.5%-5.5% driven by both its Innovative Medicine and MedTech segments. Operational sales growth is expected in the range of 5%-6%, the same as announced on the December guidance call.
Adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth is now expected to be in the range of 5%-6%. All revenue figures exclude any revenues from COVID-19 vaccine sales.
Adjusted earnings per share are expected in the range of $10.55-$10.75. The earnings range implies growth in the range of 6.4%-8.4%.
On an operational, constant-currency basis, adjusted earnings per share are expected to increase in the range of 6.4%-8.4%.
Our Take
J&J reported strong fourth-quarter results, beating estimates for earnings as well as sales. Its Innovative Medicines unit outperformed expectations, with sales of several key drugs like Darzalex, Stelara, Tremfya and Imbruvica beating estimates. J&J re-confirmed its full-year adjusted earnings and sales growth guidance that it had issued in December.
Despite the earnings beat, J&J’s shares were down 1.4% in pre-market trading. In the past year, J&J’s shares have declined 3.5% against the industry’s 17.2% increase.
Image Source: Zacks Investment Research
In August, J&J completely separated its Consumer Health business into a newly listed company called Kenvue (KVUE - Free Report) , which now operates as a separate and fully independent company.
After completion of the exchange offer, J&J now has a 9.5% stake (approximately 180 million shares) in Kenvue’s common stock, which it may monetize in a tax-efficient manner in 2024.
With the complete separation of the Consumer Health segment, J&J has now become a two-sector company focused on the Pharmaceutical and MedTech fields.
J&J’s Innovative Medicines unit is performing at above-market levels. Growth is being driven by key products like Darzalex, Stelara, Tremfya, Erleada and Uptravi, and also continued uptake from new launches, including Spravato, Carvykti and Tecvayli. The MedTech unit is showing improving trends, driven by a post-pandemic recovery in surgical procedures and contribution from new products.
Zacks Rank and Stocks to Consider
J&J currently has a Zacks Rank #3 (Hold).
Johnson & Johnson Price and Consensus
Johnson & Johnson price-consensus-chart | Johnson & Johnson Quote
Some better-ranked large drugmakers worth considering are Regeneron Pharmaceuticals (REGN - Free Report) and Novo Nordisk (NVO - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Regeneron’s 2024 earnings have risen from $41.57 per share to $43.97 per share. Regeneron’s stock has surged 29.5% in the past year.
Regeneron beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 12.34%.
Estimates for Novo Nordisk’s 2024 earnings per share have increased from $3.15 to $3.29 over the past 60 days. NVO’s stock has surged 51.3% in the past year.
Earnings of Novo Nordisk beat estimates in two of the last four quarters, missed in one and matched estimates in one, delivering an earnings surprise of 0.58% on average.