Johnson & Johnson defies baby powder asbestos concerns to beat first quarter forecasts
Shares rose at Johnson & Johnson this afternoon as the world’s biggest healthcare company beat revenue and profit forecasts for the first quarter.
Read more: Johnson & Johnson share price falls as baby powder probe intensifies
The New York-listed firm withstood concerns about asbestos in its baby powder which surfaced late last year, which drove poor performance in its consumer arm, with rising drug sales from products designed to treat cancer, psoriasis and Crohn’s disease.
The drugmaker reported a slight year-on-year rise in quarterly sales to $20bn (£15.3bn) for the first three months of 2019, above the average analyst estimate of $19.6bn, while net profit fell to $3.75bn, down from $4.37bn.
J&J’s core pharmaceuticals division broke the $10bn barrier for the quarter, rising four per cent from $9.8bn to $10.2bn, more than covering a 2.4 per cent decline in its consumer products segment from $3.4bn to $3.3bn. Sales of medical devices also fell 4.6 per cent, from $6.8bn to $6.5bn.
Why it’s interesting
J&J, the first major US drug maker to report first quarter results, has battled against claims about asbestos in its trademark baby powder this year. These drove sales in its baby care division down 14 per cent worldwide, despite a rebranding designed to allay shoppers’ concerns. It has also faced lawsuits over the opioid crisis in the United States.
As a result, its share value has struggled so far in 2019, but early indicators in pre market trading showed it rising about one per cent this afternoon. The New Jersey-based manufacturer raised its full-year sales predictions slightly, forecasting operational sales of between $82bn and $82.8bn.
What Johnson & Johnson said
“Our strong first-quarter results reflect continued underlying operational sales and adjusted EPS growth,” said chief executive Alex Gorsky.
Read more: Johnson & Johnson shares plunge in wake of asbestos report
“At the same time, we remain focused on investing in innovative technologies and platforms that will make a meaningful difference in the lives of patients around the world. I am proud of our global colleagues’ collective efforts to deliver on our long-term goals and our ability to create value for all of our stakeholders.”