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Strong Q2 at J&J, but outlook cut again due to dollar’s rise

AP – Johnson & Johnson (J&J) rode growing sales of the cancer treatment Darzalex and other key drugs to a better-than-expected second quarter, but foreign exchange rates again cut into the healthcare giant’s 2022 forecast.

After trimming its forecast in April citing exchange rates, the company did so again yesterday to a range that is below analyst expectations.

J&J, which brings in nearly half of its sales from outside the United States (US), now expects earnings of USD10 to USD10.10 per share, down from the USD10.15 to USD10.35 it forecast in the spring.

Wall Street had been expecting earnings of USD10.19 per share, according to FactSet.

The strong US dollar is nearing parity with the euro for the first time in decades, and that can affect sales for companies that do a lot of international business. A stronger dollar makes US-made products more expensive in overseas markets, while giving foreign products a price edge in the US.

J&J drew more than USD6 billion in sales from Europe in the second quarter and USD12 billion from the US.

In the quarter for J&J, sales of the blood cancer treatment Darzalex jumped 39 per cent to nearly USD2 billion. Revenue from Stelara, which is used for psoriasis and other inflammatory disorders, climbed 14 per cent to USD2.6 billion.

The Johnson & Johnson logo is seen above a trading post on the floor of the New York Stock Exchange. PHOTO: AP

Sales of J&J’s one-shot COVID-19 vaccine, which debuted last year, totalled USD544 million, with only USD45 million coming from the US.

US regulators in May strictly limited who can receive J&J’s COVID-19 vaccine due to the ongoing risk of rare but serious blood clots.

That came a month after J&J said it was suspending sales projections for the vaccine, from which it doesn’t intend to profit.

Outside pharmaceuticals, which make up J&J’s biggest business, sales slipped for the company’s medical device and consumer health segments but grew slightly when not counting exchange rates.

J&J said last fall it will split off its consumer health business, which sells Band Aids and beauty products, into a separate, publicly traded company. That will allow the world’s largest maker of healthcare products to focus on pharmaceuticals and medical devices.

J&J’s quarterly profit plunged 23 per cent to USD4.81 billion compared with last year, when earnings jumped as hospitals and the rest of the healthcare industry recovered from the initial impact of the pandemic.

Adjusted earnings per share totalled USD2.59 and sales grew three per cent to USD24.02 billion.

Industry analysts expected earnings of USD2.54 per share on USD23.77 billion in revenue.

Shares of the New Brunswick, New Jersey, company edged up less than one per cent to USD175.63 before the opening bell.

The stock has climbed about two per cent so far this year while the Dow Jones industrial average, of which J&J is a member, has dropped about 14 per cent.