JNJ Q3 - Solid Print

Johnson & Johnson (J&J) reported solid third quarter numbers yesterday. They earned $2.66 per share, versus the $2.52 that was expected. Sales for the quarter were $21.4 billion, up 6.8% year-on-year.

These were the first results since J&J spun out Kenvue, their former consumer products unit. That was probably the most significant change in the company's 137-year history. What's left is its world-class pharmaceuticals and medical technology businesses.

Sales of Darzalex (for multiple myeloma), Erleada (prostate cancer) and Stelara (immune-mediated inflammatory diseases) were strong. Those offset declines from Zytiga (prostate cancer), Imbruvica (blood cancer) and the Covid vaccine. Top-seller Xarelto (blood clotting) faces the risk of price cuts due to negotiations with the state-run Medicare programme.

The medical technology business is thriving, despite some concerns that weight-loss drugs may affect sales of knee and hip joints in years to come. Revenue rose to nearly $7.46 billion, up 10% from the third quarter of 2022.

The company commentary after the earnings release included an earnings guidance raise. They are now calling for $10.07 to $10.13 of adjusted per-share earnings for the whole of 2023.

We hold J&J shares for their broad healthcare operations, steady progress, quality management and excellent dividend yield.