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Yesterday Johnson & Johnson released third quarter results which blasted past expectations. Despite the tough conditions they managed to increase sales by 2% to $21.1bn for the quarter. Earnings per share increased 3.8% to $2.20 and guidance for the full year sales increased by $1bn.
The shining light was their medical device business (Medtech) which had sales of $6.2bn versus consensus of $5.2bn. Lockdown was hard on medical device sales because elective surgeries were halted to free up hospital space. Less movement also meant less injuries and other hospital requirements. This is also good news for Stryker, which is back at all-time highs.
Pharma sales which make up more than half of group sales were strong at $11.4bn. Their cancer drugs did very well. Having cancer was deemed a big risk for coronavirus. Patients on chronic cancer medication like Imbruvica and Darzalex would have taken no chances.
The consumer division came in line with expectations at $3.5bn.
Unfortunately, these results were spoilt by an announcement that the JNJ Covid-19 vaccine trial was halted due to an unexplained illness in a study participant. This is what happened to the Oxford vaccine and is not good news for their prospects. The share dropped 2.3% on the news.
Johnson & Johnson is a very stable business and its resilience was proven during a tough year for many sectors. It may not shoot the lights out but it holds very steady when times get tough and pays a very juicy 2.7% dividend yield.
