J&J sales grow, but strong dollar tugs at expectations

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Johnson & Johnson topped its third-quarter expectations due to pharmaceutical sales growth. However, a strong currency made it prudent again with its outlook.

J&J lowered its 2022 range on Tuesday. This was after it had lowered expectations earlier in the year due to currency exchanges.

J&J receives nearly half its sales from outside the United States. A strong U.S. dollar — now worth more than a euro for the first time in 20 years — can affect sales for companies that do a lot of international business. They must convert these sales into dollars when reporting earnings. The sales value will decrease if the dollar is stronger. It also gives foreign products an advantage in the United States.

In the third quarter, J&J’s profit climbed 22% to $4. 46 billion. Revenue rose 2% to $23. 79 billion and adjusted earnings of $2. 55 per share.

Analysts expected earnings of $2. 48 per share on $23. 36 billion in revenue, according to FactSet.

Revenue from the company’s biggest segment, pharmaceutical, climbed 2.6% — or 9% without the impact of foreign exchange — to $13.2 billion. That business was charged by sales of the blood cancer treatment Darzalex, which soared nearly 30% to $2. 06 billion.

J&J also made $2. 45 billion in worldwide sales from Stelara, which treats psoriasis and other inflammatory disorders.

The company recorded no U.S. sales in the quarter from its one-shot COVID-19 vaccine, which brought in $489 million in revenue from international markets.

J&J’s vaccine was one of three initially authorized by U.S. regulators to protect against COVID-19. Since then, interest in preventive shots has waned and J&J’s vaccine has been strictly restricted by the government due to a small risk for serious blood clots.

Sales increased by 2% in the company’s medical device segment to $6. 78 billion, while revenue slipped in consumer health. J&J will spin off this segment, which sells Band Aids, and beauty products, to a separate, publicly traded company called Kenvue.

For 2022, the company now expects adjusted earnings to range between $10. 02 and $10. 07 per share.

That compares to the $10-to-$10. 10 range the company predicted in July.

FactSet says analysts expect, on average, earnings of $10. 07 per share.

Shares of the New Brunswick, New Jersey, company slipped 78 cents to $165. 81, while broader indexes rose following Tuesday’s markets opening.

The stock was down 2.6% as of Monday’s close. That compares to the roughly 17% drop recorded by the Dow Jones industrial average, of which J&J is a component.


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