US J&J sales up 10%, healthcare giants increase dividends | KLRT

Tom Murphy, Associated Press

4 weeks ago

FILE – The Johnson & Johnson logo appears above a trading post on the New York Stock Exchange on Monday, July 12, 2021. Johnson & Johnson will report results on Tuesday, April 18, 2023. (AP Photo/Richard Drew, File) )

Johnson & Johnson beat its first-quarter forecasts as growth in the domestic market for cancer drugs and healthcare giants offset further earnings hits from the stronger dollar.

The healthcare giant posted a $68 million loss on baby powder-related one-time charges in the quarter, but sales rose more than 5% to $24.75 billion, beating expectations.

Pharmaceutical sales, the company’s largest business, increased 4% in the quarter. Most of its revenue came from immunology and cancer treatments. These include long-standing top-selling products such as Darzalex, a blood cancer drug, and Stelara, which treats psoriasis and other inflammatory conditions.

In addition to prescription drugs, Johnson & Johnson also sells medical devices such as products for knee and hip replacements. The division’s sales increased more than 7% in the quarter to $7.5 billion.

Chief Financial Officer Joe Walk said surgeries in the quarter “seemed to be at a fairly steady pace” as they returned to pre-pandemic levels.

The company’s recent acquisition of cardiovascular technology company Abiomed also contributed to medical device sales in the quarter.

J&J also has a consumer health business that sells well-known products such as Band-Aids. Sales there increased by about 7%. The company plans to spin off its business through an initial public offering by the end of this year.

Overall U.S. sales rose nearly 10% to $12.52 billion in the quarter, while international sales rose nearly 2%. Excluding currency effects, overseas sales increased by more than 8%.

A stronger dollar has hit sales for companies with a lot of international business, hurting sales for J&J and other pharmaceutical companies over the past few quarters. Companies that operate internationally convert their sales into dollars when reporting revenue. A stronger dollar will reduce its sales.

J&J’s first-quarter adjusted earnings were $2.68 per share. That beat Wall Street’s earnings forecast of $2.50 a share, according to a FactSet study.

The company also booked one-time charges in the quarter related to a proposed settlement of a lawsuit alleging that baby powder containing talc causes carcinogenicity.

Earlier this month, the company said it would set aside nearly $9 billion, more than four times what it had previously set aside, to cover potential debt.

J&J removed baby powder from stores in the United States and Canada several years ago, and will remove it from the global market this year. The company has not admitted wrongdoing as part of the proposed settlement.

J&J also announced Tuesday that its board of directors has approved a 5% increase to its quarterly dividend. That brings the dividend to $1.19 per share, an increase of 6 cents.

The New Brunswick, N.J., company also raised the lower end of its 2023 forecast range by 10 cents. The company now expects adjusted operating earnings to be between $10.50 and $10.60 per share.

Analysts expect earnings of $10.51 per share this year.

Shares of Johnson & Johnson fell 2% to $162.37 after the market opened on Tuesday. The Dow Jones Industrial Average, which includes J&J, fell. ___ Follow Tom Murphy on Twitter:

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