A Johnson & Johnson vaccine is seen in a refrigerator at the Lynchburg Fire department in Lynchburg, Virginia on March 12, 2021.
Andrew Caballero-Reynolds/AFP via Getty ImagesJohnson & Johnson is selling its vaccine, shown in a fire-department refrigerator in Virginia, on a nonprofit basis during the pandemic.
Andrew Caballero-Reynolds/AFP via Getty ImagesThe big pharma firm Johnson & Johnson signaled that one key business hard hit by the pandemic—sales of medical devices—is bouncing back as it reported higher earnings and sales than Wall Street expected for the first quarter of 2021.
Adjusted earnings came in at $2.59 per share on Tuesday morning, topping the FactSet consensus estimate of $2.34 by 10.7%. Sales totaled $22.3 billion for the quarter, slightly beating consensus expectations for $22 billion.
The company narrowed its range of forecasts for the full 2021 fiscal year, saying it now expects adjusted earnings of between $9.42 and $9.57 per share, whereas it had previously projected adjusted earnings of between $9.40 and $9.60 per share. Analysts expect earnings of $9.50 per share, according to FactSet.
The company also announced an increase in its quarterly dividend of 5%, to $1.06 per share from $1.01 per share.
Reported sales in the medical-devices division were $6.6 billion for the quarter, 8.8% higher than in the same quarter in 2020, and slightly higher than the $6.5 billion the company reported for the same quarter in 2019. Sales of the devices took a hard hit in 2020, dropping to $23 billion from $26 billion in 2019. Medical device sales in the second quarter of 2020 were down a full 27.8% from the same quarter in 2019.
The company said that the growth “reflects the benefit of market recovery from COVID-19 impacts in the prior year,” among other factors.
“Johnson & Johnson delivered a strong first quarter performance led by the above market growth of our Pharmaceutical business and continued recovery in Medical Devices,” the company’s CEO, Alex Gorsky, said in a statement.
Johnson & Johnson (ticker: JNJ) shares were down 0.2% in premarket trading. The earnings press release offered no new details on the current pause that has suspended administration of the company’s Covid-19 vaccine in the U.S.
Though the pause has grabbed headlines, and may have an impact on the worldwide Covid-19 vaccination campaign, it isn’t likely to be material for Johnson & Johnson’s earnings, or its stock price. The company is selling the vaccine on a not-for-profit basis for the course of the pandemic.
On Monday, there was news on another issue that has troubled the rollout of Johnson & Johnson’s vaccine. The contract-manufacturing firm that owns the Baltimore facility where 15 million doses of the Johnson & Johnson vaccine were ruined in a reported mix-up was told by the U.S. Food and Drug Administration to stop making doses of the vaccine altogether at that plant.
Johnson & Johnson had previously said it had taken over responsibility for the manufacturing at the plant, but on Monday the manufacturer, Emergent BioSolutions (EBS), acknowledged in a filing that the FDA had asked it to stop making new vaccine material at the plant, and to quarantine existing material there.
Shares of Johnson & Johnson are up 3.4% so far this year, and 8.7% over the past 12 months.
In a brief note out early Tuesday, Cantor Fitzgerald analyst Louise Chen wrote that the outlook was positive for the rest of the year. “We continue to believe that upward earnings revisions and multiple expansion …driven by above-market growth in its key franchises, should move JNJ shares higher,” she wrote.
The company is hosting a conference call with investors to discuss the earnings report at 8:30 a.m. on Tuesday morning.
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