Just What the Doctor Ordered

Just What the Doctor Ordered

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  • Johnson & Johnson (JNJ) reported a 25% drop in earnings and declining sales for the fourth quarter as demand dropped for its COVID-19 vaccine, while providing a cautious forecast for sales growth as the company undergoes a big transformation. Quarterly revenue fell 4.4% to $23.71 billion on fewer vaccine sales and a stronger dollar, below analyst estimates of $23.9 billion.

  • J&J forecast 2023 sales of $96.9-$97.9 billion, below Wall Street estimates, with fourth-quarter profit beating expectations due to cost management and strong demand for prescription medicines. It reported $689 million in quarterly COVID-19 vaccine sales from outside the U.S. and forecast adjusted 2023 earnings of $10.45-$10.65 per share, above analyst estimates of $10.35. The company added that it sees the impact of high inflation carrying into 2023 and expects China's major COVID-19 outbreak to dent sales at its medical devices unit in the first half of the year. 

Why it matters

J&J is splitting off its consumer product business as it looks to intensify growth by focusing on its pharmaceutical and medical technology businesses. However, Chief Executive Officer Joaquin Duato has also cautioned about the coming year, pointing to inflation, higher costs, vaccine sales and China’s COVID-19 wave. "Expect this will get called out by other MedTech companies when they issue their 2023 outlooks as well," an analyst added.


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