Home / Companies / Company Results /  J&J clocks robust sales in Q4 but charges cut profits

A big jump in prescription drug sales boosted fourth-quarter revenue at Johnson & Johnson, despite the coronavirus pandemic cutting into sales of products from contact lenses to surgical equipment and other medical devices used in procedures at hospitals swamped with covid-19 patients.

Profits dove 57% due to higher research spending, plus litigation and other one-time charges totaling $2.4 billion, but the results still cruised past Wall Street expectations.

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J&J didn’t give any updates on its coronavirus vaccine research, but executives on a conference call to discuss the quarterly results repeatedly told analysts that J&J expects to share results from its late-stage study of its experimental covid-19 vaccine—the first requiring only one dose— “by early next week."

The vaccine could become the third to receive emergency use authorization in the US, likely in February, following partners Pfizer and BioNTech, who won the first Food and Drug Administration emergency clearance, and Moderna. Both those vaccines, which use different technology than J&J’s, were granted emergency use authorization in December.

Meanwhile, J&J is also testing a two-dose vaccine as a backup and should have results on that in 2021’s second half.

The world’s biggest maker of healthcare products reported net income of $1.74 billion, or 65 cents per share, down from $4.01 billion, or $1.50 per share, a year earlier.

Adjusted net income came to $4.97 billion, or $1.86 per share, easily topping the $1.81 Wall Street analysts expected. Quarterly revenue totaled $22.48 billion, up 8.3% from $20.75 billion. Analysts had expected $21.62 billion.

“We think we’re positioned very well as we embark on 2021," chief executive officer Alex Gorsky told the analysts.

The New Brunswick, New Jersey, company said that the effects of the covid-19 pandemic reduced sales for prescription medicines and consumer health products, except for increased demand for oral care products, mainly Listerine.

The pandemic, and the associated deferral of many medical procedures, reduced sales of surgery, vision care and orthopaedics products. J&J noted its medical devices business results reflected market recovery in 2020’s second half, potentially a good sign for other device makers.

Edward Jones analyst Ashton Evans called the quarter “solid," despite covid-19 impacts. “If successful, JNJ’s vaccine supply this year will greatly help worldwide vaccination efforts, particularly given its relatively simpler storage requirements," she wrote to investors.

J&J gave its first financial forecast for 2021, saying it expects sales of $90.5 billion to $91.7 billion and adjusted earnings per share of $9.40 to $9.60. Both were up 10 % or more from 2020 and beat analysts’ 2021 forecasts for revenue of $88.59 billion and adjusted earnings per share of $8.96.

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