Johnson & Johnson Stock Rises on Better-Than-Expected Revenue, Adjusted Profit

Key Takeaways

• Johnson & Johnson shares advanced Tuesday after the pharmaceutical and medical device company posted better third-quarter sales and adjusted profit than expected.
• Net income fell sharply due to billions in one-time expenses like legal costs.
• Johnson & Johnson also lifted its full-year sales outlook, but lowered profit projections to account for a recently completed acquisition.

Johnson & Johnson (JNJ) shares advanced Tuesday after the pharmaceutical and medical device company posted better third-quarter sales and adjusted profit than expected.

Johnson & Johnson reported $22.47 billion in revenue, up 5% year-over-year and better than analysts had projected, according to estimates compiled by Visible Alpha. It registered $2.69 billion in net income, down 38% and well short of expectation, on billions in one-time expenses like legal costs and acquisitions.

Adjusted Profit Beats Estimates

After accounting for over $3 billion in one-time expenses like legal costs, "intangible asset amortization expense," and the cost of acquisitions, Johnson & Johnson's adjusted profit of $5.88 billion came in more than half a billion dollars higher than expected.

The company also adjusted its full-year outlook, lifting sales projections to $88.4 billion to $88.8 billion from the prior range of $88 billion to $88.4 billion. Still, Johnson & Johnson lowered its adjusted earnings per share (EPS) projections to $9.88 per share to $9.98 per share from $9.97 to $10.07 to account for the impact of its recently completed acquisition of V-Wave, which develops treatments for heart failure.

Chief Executive Officer (CEO) Joaquin Duato said the company's recent drug approvals and development milestones of other projects is "further strengthening our confidence in our near- and long-term growth targets."

Johnson & Johnson shares fell in premarket trading after the report but were up 2% in late-morning trading. They are about 5% higher this year.

UPDATE—This story has been updated with the latest share price information.

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