By LINDA A. JOHNSON
Johnson & Johnson’s second-quarter profit soared 73%, thanks to strong sales growth across all of its businesses as hospitals and the rest of the health care industry continued recovering from the coronavirus pandemic’s impact.
The health care giant handily topped Wall Street expectations and hiked its 2021 sales and profit forecasts sharply..
The world’s biggest maker of health care products on Wednesday reported second-quarter net income of $6.28 billion, or $2.35 per share, up from $3.63 billion, or $1.36 per share, a year earlier.
Adjusted income came to $6.63 billion, or $2.48 per share, blowing past Wall Street projections for $2.28 per share.
Revenue totaled a whopping $23.31 billion, up 27.1% from 2020′s second quarter.
The one weak spot was dismal sales of J&J’s COVID-19 vaccine, which brought in just $164 million in the quarter and $264 million so far this year.
The vaccine has been plagued by concerns about some very rare side effects and the shutdown of the Maryland factory of J&J’s U.S. contract manufacturer, Emergent BioSolutions, due to contamination problems that led to tens of millions of vaccine doses having to be trashed. It’s unclear when — or if — the U.S. Food and Drug Administration will allow the factory to resume production, which was halted in mid-April.
J&J has the only authorized vaccine that only requires one shot, so it had been expected to play a huge role in vaccinating people in rural areas and developing countries. Instead, the company has fallen far short of its supply commitments to the U.S., other governments and a World Health Organization-backed program to get affordable vaccines to poor and middle-income countries. However, J&J recently got approval to make more vaccine doses at its newly expanded factory in the Netherlands.
Company executives said they expect total 2021 COVID-19 vaccine sales of roughly $2.5 billion, mostly in the fourth quarter.
“We hope this will be the start of what we expect to become a vibrant vaccine business over time,” including vaccines it’s developing for HIV, sepsis and respiratory syncytial virus, Jennifer Taubert, head of the prescription medicine business, told analysts on a call to discuss the quarter’s results.
Johnson & Johnson noted recent studies show the vaccine works well against coronavirus variants and protects people for at least eight months. The company said it’s selling its vaccine on a nonprofit basis, for $5 to $8 per dose.
J&J, based in New Brunswick, New Jersey, said foreign sales jumped 29.5% to $11.39 billion, while U.S. sales rose 24.9% to $11.92 billion.
J&J’s medical device and diagnostics division had been a laggard amid a lengthy restructuring and the pandemic leading people to delay scheduled surgeries and other care. It turned in the best performance in the quarter, with revenue jumping 62.7% to $6.98 billion.
Still, the company warned that some U.S. hospital systems are again delaying elective procedures as infections and hospitalizations increase amid the latest surge, caused by the highly transmissible delta variant.
The maker of cancer drugs Darzalex and Imbruvica reported that prescription drug sales, long the company’s main growth driver, rose 17.2% to $12.6 billion.
Sales of consumer health products like Tylenol and Band-Aids, which have been buoyed during the pandemic by medicine cabinet stocking and an increased focus on wellness, climbed 13.3% to $3.74 billion.
“The company’s earnings growth has accelerated, driven by newly launched drugs and a decreasing impact from patent losses,” Edward Jones analyst Ashtyn Evans wrote to investors, adding that the current stock price doesn’t fully reflect the growth of J&J’s new products.
Evans, noting recent headlines about lawsuits over J&J’s talc products and a potential $5 billion settlement with states over its sales of opioid painkillers Duragesic and Nucynta, said progress in ending that litigation should reduce uncertainty about the stock.
Overall sales had a 4.1% benefit from favorable currency exchange rates. During the quarter, J&J’s effective tax rate declined to 5.8% and the company paid shareholders $2.8 billion in dividends.
During the quarter, the FDA approved J&J’s Rybrevant, the first targeted treatment for non-small cell lung cancer that has certain genetic mutations.
Johnson & Johnson said it expects adjusted full-year earnings in the range of $9.60 to $9.70 per share, up from its April forecast of $9.42 to $9.57. It expects revenue in the range of $93.8 billion to $94.6 billion, up from $90.6 billion to $91.6 billion.
In afternoon trading, J&J shares rose 82 cents to $169.27.
Source: https://apnews.com/article/business-health-coronavirus-pandemic-3018226a59e054fa91cbd0f58f8d8b62
