J&J reports upbeat sales and raises its 2021 profit forecast

-- Drug sales rose about 14% from a year ago to $13 billion

-- Revenue rose 11% y-o-y in Q3 to $23.34 billion, still below analysts estimates of $23.64 billion

Sales of Johnson and Johnson jumped in the third quarter indicating a rerun of frequent visits to the doctor which had witnessed a halt during the pandemic-induced lockdown. 

The pharmaceutical giant raised its 2021 profit forecast as strong performance across its main divisions drove its quarterly result. 

Drug sales rose about 14% from a year ago to $13 billion. The pandemic-induced lockdown which forced hospitals to postpone elective surgeries resulted in a major fall in the company’s medical device unit, which generated $6.6 billion, an 8% increase this year. Sales of consumer products such as Tylenol, Motrin, and skin-care lines rose 5.7%, excluding acquisitions and divestitures.

The company’s revenue rose 11% year over year in the third quarter to $23.34 billion, failing to beat Wall Street analysts' estimate of $23.64 billion, as per FactSet. Earnings per share rose to $2.60, up from $1.33 a year ago after stripping out one-time items.

CEO Alex Gorsky said the financial results “demonstrate solid performance across Johnson & Johnson, driven by robust above-market results in pharmaceuticals, ongoing recovery in medical devices, and strong growth in consumer health.”

UNDERLINING THE GREY ZONES

J&J’s single-shot COVID-19 vaccine produced $500 million in the quarter, falling short of the average estimate of $762 million. The company maintained its COVID-19 vaccine sales outlook for the year at $2.5 billion.

ALSO READ: J&J says Covid booster shot increases protection when given two months after first dose

J&J also recorded a $1.4 billion litigation charge in its third-quarter results tied to the bankruptcy earlier this month of a subsidiary involved in talc-related liabilities. It put the talc claims alleging its baby powder and other talc-based products caused cancer, into an entity called LTL Management, which filed for bankruptcy protection on October 14 in North Carolina, according to the company and court records.

READ MORE:  J&J puts talc liabilities into bankruptcy

Shares of J&J jumped more than 1% in premarket trading. At 1:47 PM ET on Tuesday, the stock was up by 2.26% trading $163.74. 

CFO Joseph Wolk said, “I always have a little bit of a smile when our stock reacts positively or negatively as much as it does when there’s vaccine new. The strength and breadth of our business is the story of 2020 and 2021.” 

Inputs from Johnson and Johnson

Picture Credits: Reuters