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Johnson & Johnson’s (JNJ - Free Report) second-quarter 2024 earnings came in at $2.82 per share, which beat the Zacks Consensus Estimate of $2.71. Earnings rose 10.2% from the year-ago period.
Adjusted earnings exclude intangible amortization and some other special items. Including these items, J&J reported second-quarter earnings of $1.93 per share, down 5.9% year over year.
Sales of this drug and medical devices giant came in at $22.45 billion, which beat the Zacks Consensus Estimate of $22.38 billion. Sales rose 4.3% from the year-ago quarter, reflecting an operational increase of 6.6% and a negative currency impact of 2.3%. Organically, excluding the impact of acquisitions/divestitures and currency, sales rose 6.5% on an operational basis. Excluding sales of COVID-19 vaccine, organic sales rose 7.1%.
Second-quarter sales in the domestic market rose 7.8% to $12.57 billion. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, domestic sales rose 7.6% in the quarter.
International sales rose 0.2% on a reported basis to $9.88 billion, reflecting an operational decrease of 5.1% and a negative currency impact of 4.9%. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, international sales rose 5.3% in the quarter.
Segment Details
In August 2023, 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. With the complete separation of Kenvue, J&J has now become a two-sector company focused on the Pharmaceutical and MedTech fields.
Sales in J&J’s Innovative Medicines segment (previously the Pharmaceutical segment) rose 5.5% year over year to $14.49 billion, reflecting a 7.8% operational increase and a 2.3% negative currency impact. Excluding the impact of all acquisitions and divestitures and currency on an adjusted operational basis, worldwide sales rose 8%. Excluding sales of COVID-19 vaccine, organic sales rose 8.8%. Innovative Medicines sales beat the Zacks Consensus Estimate of $14.13 billion as well as our model estimate of $14.0 billion.
Higher sales of key products such as Darzalex, Stelara, Tremfya, Uptravi and Erleada drove the segment’s growth. New drugs like Carvykti, Tecvayli and Spravato also contributed to growth. The sales growth was partially dampened by lower sales of Imbruvica, COVID-19 vaccine and generic/biosimilar competition to drugs like Zytiga and Remicade.
Sales of blockbuster multiple myeloma medicine Darzalex rose 18.4% year over year to $2.88 billion in the quarter. Sales slightly missed the Zacks Consensus Estimate of $2.89 billion and our model estimate of $2.97 billion. Sales of the blockbuster psoriasis drug Stelara grew 3.1% to $2.89 billion in the quarter. Stelara sales beat the Zacks Consensus Estimate of $2.78 billion and our model estimate of $2.76 billion.
Imbruvica sales declined 8.5% to $770.0 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 $737.0 million and our estimate of $744.2 million.
Erleada generated sales of $736 million in the quarter, up 29.8% year over year. Erleada sales beat the Zacks Consensus Estimate of $692.0 million as well as our model estimate of $682.5 million. Tremfya recorded sales of $906 million in the quarter, up 28.3% year over year. Tremfya sales beat the Zacks Consensus Estimate of $871.0 million as well as our model estimate of $838.9 million.
New drug Carvykti recorded sales of $186 million, up 59.8% year over year. Another new drug, Tecvayli, recorded sales of $135 million in the quarter, up 42.9% year over year,
Spravato recorded sales of $271.0 million, up 60.2% year over year.
Pulmonary arterial hypertension drug Uptravi recorded sales of $426.0 million, up 6.6% year over year. Xarelto sales declined 7.9% in the quarter to $587 million.
Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales rose 2.2% to $1.05 billion in the quarter. Simponi/Simponi Aria sales rose 1.6% to $537.0 million, while Prezista sales declined 11% to $438.0 million.
Zytiga sales declined 27.7% to $165.0 million in the quarter due to generic competition. Sales of Remicade were down 14.9% in the quarter to $393 million.
MedTech segment sales came in at $7.96 billion, up 2.2% from the year-ago period, as an operational increase of 4.4% was offset by a negative currency movement of 2.2%. MedTech segment sales missed the Zacks Consensus Estimate of $8.22 billion as well as our model estimate of $8.21 billion.
Excluding the impact of all acquisitions and divestitures, and currency, on an adjusted operational basis, worldwide sales rose 4%.
2024 Outlook
J&J maintained its total revenue expectation in the range of $88.0 billion-$88.4 billion for 2024. The sales range indicates growth in the range of 4.7%-5.2%. Operational sales growth is expected in the range of 6.1%-6.6%, compared with 5.5%-6% expected previously.
The adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth guidance was maintained in the range of 5.5%-6%.
The revenue figures exclude revenues from COVID-19 vaccine sales.
However, the earnings guidance was lowered to account for the financing costs associated with recent acquisitions of medical device company Shockwave Medical (closed in May) and private biotech Proteologix (closed in June).
The adjusted earnings per share guidance was lowered from a range of $10.57-$10.72 per share to $9.97-$10.07 per share. The earnings range implies growth in the range of 0.5% – 1.5% (6.6% – 8.1% expected previously).
On an operational, constant-currency basis, adjusted earnings per share are expected to increase in the range of 0.8%-1.8% (previously 6.9%-8.4%).
Our Take
J&J’s second-quarter results were strong as it beat estimates for both earnings and sales. Its Innovative Medicines unit outperformed expectations, with sales of several key drugs like Stelara, Tremfya and Imbruvica beating estimates. However, sales of Darzalex missed expectations. The MedTech unit sales also missed estimates. As expected, J&J lowered its previously issued earnings growth expectations for 2024 as the company’s expectation of a better operational performance was offset by dilution from recent acquisitions.
J&J’s shares were down slightly in pre-market trading on Wednesday. So far this year, J&J’s shares have declined 3.7% against the industry’s 23.6% increase.
Image Source: Zacks Investment Research
J&J’s Innovative Medicines unit is performing at above-market levels. Its 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 recovery in surgical procedures and contribution from new products. However, the company is incurring huge legal expenses due to its pending lawsuits, which allege personal injuries to patients caused by the use of its talc products. J&J will also face the patent expiration of the blockbuster drug Stelara in 2025. The launch of generics could significantly erode the drug’s sales.
In the past 60 days, estimates for Halozyme Therapeutics’ 2024 earnings per share have improved from $3.69 per share to $3.90 per share. Estimates for 2025 have increased from $4.50 per share to $4.81 per share. Year to date, shares of Halozyme Therapeutics have risen 49.1%.
Earnings of Halozyme Therapeutics beat estimates in three of the last four quarters while meeting the same once. HALO delivered a four-quarter average earnings surprise of 9.40%
In the past 60 days, 2024 loss estimates for Moderna have improved from $7.50 per share to $7.46 per share. For 2025, loss estimates have improved from $5.33 per share to $5.29 per share in the past 60 days. Moderna’s shares have risen 25.9% year to date.
Earnings of Moderna beat estimates in each of the last four quarters, delivering a four-quarter average earnings surprise of 55.39%.
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J&J (JNJ) Q2 Earnings & Sales Top, EPS View Cut on M&A Costs
Johnson & Johnson’s (JNJ - Free Report) second-quarter 2024 earnings came in at $2.82 per share, which beat the Zacks Consensus Estimate of $2.71. Earnings rose 10.2% from the year-ago period.
Adjusted earnings exclude intangible amortization and some other special items. Including these items, J&J reported second-quarter earnings of $1.93 per share, down 5.9% year over year.
Sales of this drug and medical devices giant came in at $22.45 billion, which beat the Zacks Consensus Estimate of $22.38 billion. Sales rose 4.3% from the year-ago quarter, reflecting an operational increase of 6.6% and a negative currency impact of 2.3%. Organically, excluding the impact of acquisitions/divestitures and currency, sales rose 6.5% on an operational basis. Excluding sales of COVID-19 vaccine, organic sales rose 7.1%.
Second-quarter sales in the domestic market rose 7.8% to $12.57 billion. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, domestic sales rose 7.6% in the quarter.
International sales rose 0.2% on a reported basis to $9.88 billion, reflecting an operational decrease of 5.1% and a negative currency impact of 4.9%. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, international sales rose 5.3% in the quarter.
Segment Details
In August 2023, 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. With the complete separation of Kenvue, J&J has now become a two-sector company focused on the Pharmaceutical and MedTech fields.
Sales in J&J’s Innovative Medicines segment (previously the Pharmaceutical segment) rose 5.5% year over year to $14.49 billion, reflecting a 7.8% operational increase and a 2.3% negative currency impact. Excluding the impact of all acquisitions and divestitures and currency on an adjusted operational basis, worldwide sales rose 8%. Excluding sales of COVID-19 vaccine, organic sales rose 8.8%. Innovative Medicines sales beat the Zacks Consensus Estimate of $14.13 billion as well as our model estimate of $14.0 billion.
Higher sales of key products such as Darzalex, Stelara, Tremfya, Uptravi and Erleada drove the segment’s growth. New drugs like Carvykti, Tecvayli and Spravato also contributed to growth. The sales growth was partially dampened by lower sales of Imbruvica, COVID-19 vaccine and generic/biosimilar competition to drugs like Zytiga and Remicade.
Sales of blockbuster multiple myeloma medicine Darzalex rose 18.4% year over year to $2.88 billion in the quarter. Sales slightly missed the Zacks Consensus Estimate of $2.89 billion and our model estimate of $2.97 billion. Sales of the blockbuster psoriasis drug Stelara grew 3.1% to $2.89 billion in the quarter. Stelara sales beat the Zacks Consensus Estimate of $2.78 billion and our model estimate of $2.76 billion.
Imbruvica sales declined 8.5% to $770.0 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 $737.0 million and our estimate of $744.2 million.
Erleada generated sales of $736 million in the quarter, up 29.8% year over year. Erleada sales beat the Zacks Consensus Estimate of $692.0 million as well as our model estimate of $682.5 million. Tremfya recorded sales of $906 million in the quarter, up 28.3% year over year. Tremfya sales beat the Zacks Consensus Estimate of $871.0 million as well as our model estimate of $838.9 million.
New drug Carvykti recorded sales of $186 million, up 59.8% year over year. Another new drug, Tecvayli, recorded sales of $135 million in the quarter, up 42.9% year over year,
Spravato recorded sales of $271.0 million, up 60.2% year over year.
Pulmonary arterial hypertension drug Uptravi recorded sales of $426.0 million, up 6.6% year over year. Xarelto sales declined 7.9% in the quarter to $587 million.
Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales rose 2.2% to $1.05 billion in the quarter. Simponi/Simponi Aria sales rose 1.6% to $537.0 million, while Prezista sales declined 11% to $438.0 million.
Zytiga sales declined 27.7% to $165.0 million in the quarter due to generic competition. Sales of Remicade were down 14.9% in the quarter to $393 million.
MedTech segment sales came in at $7.96 billion, up 2.2% from the year-ago period, as an operational increase of 4.4% was offset by a negative currency movement of 2.2%. MedTech segment sales missed the Zacks Consensus Estimate of $8.22 billion as well as our model estimate of $8.21 billion.
Excluding the impact of all acquisitions and divestitures, and currency, on an adjusted operational basis, worldwide sales rose 4%.
2024 Outlook
J&J maintained its total revenue expectation in the range of $88.0 billion-$88.4 billion for 2024. The sales range indicates growth in the range of 4.7%-5.2%. Operational sales growth is expected in the range of 6.1%-6.6%, compared with 5.5%-6% expected previously.
The adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth guidance was maintained in the range of 5.5%-6%.
The revenue figures exclude revenues from COVID-19 vaccine sales.
However, the earnings guidance was lowered to account for the financing costs associated with recent acquisitions of medical device company Shockwave Medical (closed in May) and private biotech Proteologix (closed in June).
The adjusted earnings per share guidance was lowered from a range of $10.57-$10.72 per share to $9.97-$10.07 per share. The earnings range implies growth in the range of 0.5% – 1.5% (6.6% – 8.1% expected previously).
On an operational, constant-currency basis, adjusted earnings per share are expected to increase in the range of 0.8%-1.8% (previously 6.9%-8.4%).
Our Take
J&J’s second-quarter results were strong as it beat estimates for both earnings and sales. Its Innovative Medicines unit outperformed expectations, with sales of several key drugs like Stelara, Tremfya and Imbruvica beating estimates. However, sales of Darzalex missed expectations. The MedTech unit sales also missed estimates. As expected, J&J lowered its previously issued earnings growth expectations for 2024 as the company’s expectation of a better operational performance was offset by dilution from recent acquisitions.
J&J’s shares were down slightly in pre-market trading on Wednesday. So far this year, J&J’s shares have declined 3.7% against the industry’s 23.6% increase.
Image Source: Zacks Investment Research
J&J’s Innovative Medicines unit is performing at above-market levels. Its 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 recovery in surgical procedures and contribution from new products. However, the company is incurring huge legal expenses due to its pending lawsuits, which allege personal injuries to patients caused by the use of its talc products. J&J will also face the patent expiration of the blockbuster drug Stelara in 2025. The launch of generics could significantly erode the drug’s sales.
Zacks Rank and Stocks to Consider
J&J currently has a Zacks Rank #4 (Sell).
Some better-ranked drug/biotech companies are Halozyme Therapeutics (HALO - Free Report) and Moderna (MRNA - Free Report) . While Halozyme Therapeutics sports a Zacks Rank #1 (Strong Buy), Moderna has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Halozyme Therapeutics’ 2024 earnings per share have improved from $3.69 per share to $3.90 per share. Estimates for 2025 have increased from $4.50 per share to $4.81 per share. Year to date, shares of Halozyme Therapeutics have risen 49.1%.
Earnings of Halozyme Therapeutics beat estimates in three of the last four quarters while meeting the same once. HALO delivered a four-quarter average earnings surprise of 9.40%
In the past 60 days, 2024 loss estimates for Moderna have improved from $7.50 per share to $7.46 per share. For 2025, loss estimates have improved from $5.33 per share to $5.29 per share in the past 60 days. Moderna’s shares have risen 25.9% year to date.
Earnings of Moderna beat estimates in each of the last four quarters, delivering a four-quarter average earnings surprise of 55.39%.