What happened
A pre-market rally in Johnson & Johnson (JNJ) stock Tuesday fizzled by the end of the trading session, with the shares ultimately trading flat across the day. The company published its latest set of quarterly results, and the performance of the stock clearly showed investors weren’t all that impressed.
So what
For its fourth quarter of 2022, Johnson & Johnson’s total sales dropped in excess of 4% year over year to $23.7 billion. Management attributed this to unfavorable foreign exchange rates and a notable drop in COVID-19 vaccine sales. In contrast, non-GAAP (adjusted) net income shot nearly 10% higher to slightly over $6.2 billion, or $2.35 per share.
Those two headline results meant a mixed quarter for Johnson & Johnson. On average, analysts tracking the stock were estimating it would earn more — $23.9 billion, to be exact, the top line. Yet they were collectively anticipating per-share, adjusted net income of only $2.24.
Of Johnson & Johnson’s three main divisions, only consumer health recorded an increase in sales, but this was marginal at 1%. The other two, pharmaceutical and medtech (medical technology), saw declines of over 7% and a bit more than 1%, respectively. Somewhat uncomfortably, it’s the consumer health unit that’s slated to be hived off into a separate company, to be known as Kenvue, toward the end of 2023.
Now what
Johnson & Johnson proffered guidance for full-year 2023 in its earnings release. The company anticipates its headline sales figure will come in at $96.9 billion to $97.9 billion, representing an increase of 4.5% to 5.5% over the 2022 result. Adjusted earnings per share should also see a rise, improving by 3% to 5% to reach $10.45 to $10.65.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
