AP – Johnson & Johnson (J&J) beat first-quarter expectations, as growth in cancer treatments and the health care giant’s home market helped counter another revenue hit from the strong dollar.
The health care giant booked a USD68 million loss on a one-time charge in the quarter related to its baby powder, and revenue grew more than five per cent to USD24.75 billion, which was better than anticipated.
Sales in pharmaceuticals, the company’s largest business, grew four per cent in the quarter.
The bulk of that revenue came from immunology and cancer treatments, including long-standing top sellers like the blood cancer treatment Darzalex and Stelara, which treats psoriasis and other inflammatory disorders.
Aside from prescription drugs, J&J also sells medical devices, including products for knee and hip replacements. Sales in that segment grew more than seven per cent to USD7.5 billion in the quarter.
Chief Financial Officer Joe Wolk said surgical procedures “seem to have hit much more of a steady cadence” in the quarter as they climb back toward levels seen before the COVID-19 pandemic.
The recent acquisition of cardiovascular technology company Abiomed also helped medical devices in the quarter. J&J also has a consumer health business that sells well-known products like Band-Aids. Sales there grew about seven per cent. The company expects to spin that business off with an initial public offering by the end of this year.
Overall United States (US) sales grew nearly 10 per cent to USD12.52 billion in the quarter, while international sales climbed nearly two per cent. Not counting the impact of currency rates, international sales grew over eight per cent.
A strong US dollar affects sales for companies with a lot of international business, and that has hit the top line of J&J and other drugmakers over the past few quarters. Companies with international business convert those sales into dollars when they report earnings. The stronger dollar decreases the value of those sales. Adjusted earnings totaled USD2.68 per share in the first quarter. That topped Wall Street projections for per-share earnings of USD2.50, according to a survey by FactSet.
The company also booked in the quarter a one-time charge tied to a proposal for settling lawsuits alleging that its baby powder containing talc causes cancer.
The company said earlier this month that it would set aside nearly USD9 billion, more than quadrupling the amount that the company had previously reserved to pay for its potential liability.
J&J pulled the baby powder from US and Canadian store shelves a few years ago and is removing it from worldwide markets this year. The company isn’t admitting any wrongdoing as part of the proposed settlement.
J&J also said on Tuesday that its board approved a five per cent increase in the company’s quarterly dividend. That bumps the payout up six cents to USD1.19 per share.
The New Brunswick, New Jersey, company also boosted the lower end of its forecasted range for 2023 by a dime. It now expects adjusted operational earnings between USD10.50 and USD10.60 per share.
Analysts expect earnings of USD10.51 per share this year.
Shares of J&J fell two per cent, to USD162.37 after markets opened on Tuesday.
