Health care bellwether Johnson & Johnson topped second-quarter expectations Tuesday, but JNJ stock toppled on its trimmed outlook.
The best performance came out of J&J's pharmaceuticals division, which saw sales climb 6.7% on a strict, as-reported basis to $13.32 billion. That narrowly topped forecasts, SVB Securities analyst David Risinger said in a report. He called out psoriasis treatment Stelara and cancer drug Darzalex as strong performers. The company also reported unexpected strength for its one-shot Covid vaccine, which brought in nearly double what analysts expected. Sales were $544 million vs. forecasts for $278 million.
"The two key drivers of upside were Covid vaccine sales $266 million above consensus and Darzalex sales $168 million above," Risinger said. "The two key shortfalls vs. consensus were Imbruvica $130 million below and pulmonary hypertension (treatments) $74 million below."
On today's stock market, JNJ stock rose fell 1.5% to 171.69.
JNJ Stock: Pharma Leads Growth
Overall, the health care giant reported adjusted earnings of $2.59 a share on sales of $24.02 billion in the second quarter. Analysts polled by FactSet expected J&J to earn $2.54 a share on $23.77 billion in sales. On a year-over-year basis, earnings rose 4% while sales climbed 3%.
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Third Bridge's Lee Brown noted J&J's drug business accounts for about 55% of its revenue. Brown is the global sector lead for health care at the research firm. In addition to strong performances from Stelara and Darzalex — up a respective 14% and 39% year over year — he noted J&J drugs Erleada and Invega are also gaining share. Erleada treats prostate cancer. Invega is a schizophrenia medicine.
Meanwhile, the company's consumer health and medtech segments saw sales slip about 1% apiece from the same quarter last year.
But the medtech results bode well for Stryker, Zimmer Biomet and Intuitive Surgical, Evercore ISI analyst Vijay Kumar said in a report. Stryker and Zimmer rival Johnson & Johnson with hip and knee replacements. For J&J, revenue from hips came in line with estimates, while knees beat.
Johnson & Johnson's advanced surgery revenue was light. But Intuitive Surgical tends to outperform J&J in that arena, Kumar said.
Trimmed 2022 Outlook
For the year, Johnson & Johnson guided to adjusted earnings of $10.05 a share on sales of $93.8 billion. That's based on the midpoint of its outlook. Three months ago, it had forecast adjusted earnings of $10.25 a share on sales of $95.3 billion. Wall Street was looking for adjusted profit of $10.19 a share and $96.05 billion in sales in 2022.
The New Brunswick, N.J.-based company said the strengthening U.S. dollar will impact its full-year results.
"Our solid second-quarter results across Johnson & Johnson reflect the strength and resilience of our company's market leadership in the midst of macroeconomic challenges," Chief Executive Joaquin Duato said in a news release.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
