Johnson & Johnson raises 2016 profits forecast
Jul 20, 2016
Johnson & Johnson on Tuesday raised its full-year 2016 sales and earnings forecasts and reported quarterly results that beat estimates, helped by strength in its prescription drugs business.
Shares hit a record high of $125.75, before edging back fractionally.
Analysts said the overall results bode well for J&J shares. “We expect today’s results to drive further upside and, given investor preference for safer names with good dividend yields in the current market environment, we think it bodes well for the stock over the near term,” said Credit Suisse analyst Vamil Divan.
Strong demand for the company’s Imbruvica cancer drug and Xarelto blood thinner boosted pharmaceutical sales, which jumped 8.9 per cent to $8.7 billion in the quarter.
Sales of autoimmune drug Remicade, J&J’s biggest product, rose 6.7 percent to $1.78 billion.
The company, which is the first major US drugmaker to announce quarterly earnings, raised its 2016 sales forecast to a range of $71.5 billion to $72.2 billion, from $71.2 billion to $71.9 billion previously.
J&J expects sales to grow at a faster rate than the global healthcare market, which it sees increasing by 3 to 5 per cent annually over the next five years, chief executive Alex Gorsky said on a conference call.
The maker of a variety of products from Tylenol to Band-Aid bandages to Acuvue contact lenses also increased its adjusted profit range to $6.63 to $6.73 per share, from $6.53 to $6.68.
INew Jersey-based J&J is also restructuring its medical device business to focus on areas such as artificial knees and devices for trauma surgery. Worldwide device sales inched up about 1 per cent to $6.4 billion in the quarter.
Total revenue rose 3.9 percent to $18.5 billion. Net earnings fell to $3.997 billion, or $1.43 per share, from $4.516 billion, or $1.61 per share.
Excluding special items, J&J earned $1.74 per share. Analysts, on average, had expected profit of $1.68 per share on revenue of $17.98 billion.
Source: THE IRISH TIMES