Johnson & Johnson Surpasses Market Expectations in Q4 Earnings Last Year

[Asia Economy Reporter Eunmo Koo] Johnson & Johnson's fourth-quarter profit last year exceeded market expectations. However, sales slightly declined compared to forecasts.

According to KB Securities on the 24th, Johnson & Johnson's fourth-quarter earnings per share (EPS) last year decreased by 4.6% year-on-year to $1.88, slightly surpassing the market expectation of $1.87, but sales recorded $20.75 billion (+1.7%), lower than expected. Total sales for the year reached $82.06 billion, up 0.6% from the previous year, and EPS increased by 6.1% to $8.68.

Johnson & Johnson did not provide annual guidance this year due to uncertainties such as lawsuits, non-recurring gains and losses, and acquisition-related costs. The market's forecast for this year expects sales to increase by 4.2% year-on-year to $85.52 billion, and EPS to rise by 5.0% to $9.11.

Fourth-quarter growth was evenly achieved through the pharmaceutical sector. Johnson & Johnson's annual pharmaceutical sales reached $42.2 billion, growing 3.6% year-on-year; consumer sales increased by 0.3% to $13.9 billion; and medical devices recorded $25.96 billion, down 3.8%. Alex Gorsky, Chairman of Johnson & Johnson, stated, “Thanks to the strength of our pharmaceutical business, we were able to accelerate the performance of the medical device business and improve the profitability of the consumer business.”

Looking at each sector, the consumer segment's annual sales, excluding acquisition and divestiture effects, increased by 1.4%. KB Securities analyst Sehwan Kim explained, “Strong sales of Neutrogena beauty products, Tylenol, and Motrin offset relatively weak baby care product sales.”

The pharmaceutical sector grew 5.8% annually, excluding acquisition and divestiture effects. Products such as the psoriasis treatment Stelara, immunotherapy inflammatory disease treatment Darzalex, as well as Imbruvica and Tremfya, showed strong sales performance.

The medical device sector also grew 3.9% annually, excluding acquisition and divestiture effects. Growth was driven by electrophysiology products used in interventional procedure solutions, advanced surgical fields with endocutters, and sales of Acuvue lenses.

Johnson & Johnson is expected to continue stable growth going forward. Analyst Kim said, “Stable profit growth and appropriate shareholder returns have increased the 12-month forward return on equity (ROE) since 2015, but high expectations and price-to-book ratio (PBR) have also risen, so the stock price is considered to be at a reasonable level.”