Earnings Release. Is Johnson & Johnson A Buy?

 

Johnson & Johnson (NYSE: JNJ) today announced results for first-quarter 2021. “Johnson & Johnson delivered a strong first quarter performance led by the above market growth of our Pharmaceutical business and continued recovery in Medical Devices,” said Alex Gorsky, Chairman and Chief Executive Officer. “The ability to deliver these results while simultaneously advancing our robust pipeline of life-enhancing medicines, products and solutions during these times is a testament to the strength and resilience of our business and the dedication of the 135,000 employees of Johnson & Johnson who strive every day to profoundly change the trajectory of health for humanity and make healthier communities for everyone, everywhere.”

– 2021 First Quarter Sales of $22.3 Billion reflecting strong growth of 7.9%, operational growth of 5.5%* and adjusted operational growth of 6.0%*

– 2021 First Quarter EPS of $2.32 increased 6.9%; adjusted EPS of $2.59 increased 12.6%*

– Company increased 2021 Full-Year guidance for adjusted operational sales growth to 9.3%* and adjusted operational EPS growth to 16.8%* at the midpoint

 

 

OVERALL FINANCIAL RESULTS: 

FIRST QUARTER

($ in Millions, except EPS)

2021

2020

%  Change

Reported Sales

$        22,321

$        20,691

7.9%

Net Earnings

6,197

5,796

6.9

EPS (diluted)

$            2.32

$            2.17

6.9%

Non-GAAP*

FIRST QUARTER

($ in Millions, except EPS)

2021

2020

%  Change

Operational Sales1,2

5.5%

Adjusted Operational Sales1,3

6.0

Adjusted Net Earnings1,4

6,924

6,154

12.5

Adjusted EPS (diluted)1,4

$            2.59

$            2.30

12.6%

1

Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules 

2

Excludes the impact of translational currency

3

Excludes the net impact of acquisitions and divestitures and translational currency

4

Excludes intangible amortization expense and special items

REGIONAL SALES RESULTS:

FIRST QUARTER

%  Change

 

($ in Millions)

2021

2020


Reported


Operational1,2


Currency

Adjusted
Operational1,3

U.S.

$        11,111

$        10,699

3.9%

3.9

3.9

International

11,210

9,992

12.2

7.3

4.9

8.2

Worldwide

$        22,321

$        20,691

7.9%

5.5

2.4

6.0

1

Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules

2

Excludes the impact of translational currency

3

Excludes the net impact of acquisitions and divestitures and translational currency

Note: values may have been rounded

SEGMENT SALES RESULTS:

FIRST QUARTER

%  Change

($ in Millions)

2021

2020


Reported


Operational1,2


Currency

Adjusted
Operational1,3

Consumer Health

$          3,543

$          3,625

(2.3)%

(3.3)

1.0

(2.9)

Pharmaceutical

12,199

11,134

9.6

7.1

2.5

7.4

Medical Devices

6,579

5,932

10.9

8.0

2.9

8.8

Worldwide

$        22,321

$        20,691

7.9%

5.5

2.4

6.0

 1

Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules

 2

Excludes the impact of translational currency

 3

Excludes the net impact of acquisitions and divestitures and translational currency

Note: values may have been rounded

FIRST-QUARTER 2021 SEGMENT COMMENTARY:

Consumer Health
Consumer Health worldwide operational sales, excluding the net impact of acquisitions and divestitures, declined 2.9%* primarily driven by negative prior year comparisons related to the COVID-19 pantry loading in Q1 2020, mainly in over-the counter products.  Partially offsetting the decline is growth in LISTERINE in oral care products, JOHNSON’S BABY in baby care products, international skin health/beauty products and NICORETTE in international over-the-counter products.

Pharmaceutical
Pharmaceutical worldwide operational sales, excluding the net impact of acquisitions and divestitures, grew 7.4%* driven by DARZALEX (daratumumab), for the treatment of multiple myeloma, STELARA (ustekinumab), a biologic for the treatment of a number of immune-mediated inflammatory diseases, ERLEADA (apalutamide), a next-generation androgen receptor inhibitor for the treatment of patients with prostate cancer, TREMFYA (guselkumab), a biologic for the treatment of adults living with moderate to severe plaque psoriasis, and for adults with active psoriatic arthritis,  INVEGA SUSTENNA/XEPLION/INVEGA TRINZA/TREVICTA (paliperidone palmitate), long-acting, injectable atypical antipsychotics for the treatment of schizophrenia in adults, IMBRUVICA (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, a type of blood or lymph node cancer. This growth was partially offset by biosimilar and generic competition, with declines primarily in REMICADE (infliximab), a biologic approved for the treatment of a number of immune-mediated inflammatory diseases, and U.S. ZYTIGA (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic castration-resistant prostate cancer.

Medical Devices
Medical Devices worldwide operational sales, excluding the net impact of acquisitions and divestitures, grew 8.8%*, and reflects the benefit of market recovery from COVID-19 impacts in the prior year. Contributors to growth were electrophysiology products in the Interventional Solutions business, worldwide biosurgery and energy products, and international endocutters in Advanced Surgery, wound closure products in General Surgery, contact lenses and surgery in the Vision business and trauma products in Orthopaedics; partially offset by knee products in Orthopaedics.

NOTABLE NEW ANNOUNCEMENTS IN THE QUARTER:  
The information contained in this section should be read in conjunction with Johnson & Johnson’s other disclosures filed with the Securities and Exchange Commission, including its Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. Copies of these filings are available online at www.sec.govwww.jnj.com or on request from Johnson & Johnson. The reader is also encouraged to review all other news releases available online in the Investors section of the company’s website at news releases.

Regulatory
Decisions

PONVORY (ponesimod) approved by U.S. FDA, an oral treatment for adults with relapsing
multiple sclerosis proven superior to (teriflunomide) in reducing annual relapses and brain
lesions

(press release)

Johnson & Johnson Single-Shot COVID-19 Vaccine granted conditional marketing
authorization by European Commission

(press release)

Johnson & Johnson Single-Shot COVID-19 Vaccine granted emergency use listing by the
World Health Organization

(press release)

Johnson & Johnson COVID-19 Vaccine authorized by U.S. FDA for emergency use

(press release)

SPRAVATO (Esketamine Nasal Spray) authorized in Europe for the rapid reduction of
depressive symptoms in a psychiatric emergency for patients with major depressive disorder

(press release)

MONOFOCAL INTRAOCULAR LENS – TECNIS EYHANCE AND TECNIS EYHANCE
TORIC II IOLS – receives FDA approval for a next generation treatment for cataract patients

(press release)

Regulatory
Submission

Submission of supplemental new drug application to U.S. FDA by ViiV Healthcare for
expanded use of CABENUVA (rilpivirine and cabotegravir) as an HIV treatment for use
every two months

(press release)

Other

Janssen provides update on Phase 3 ACIS Study in patients with metastatic castration-
resistant prostate cancer treated with ERLEADA (apalutamide) and ZYTIGA (abiraterone
acetate) plus prednisone combination ¹

(press release)

Johnson & Johnson announces advance purchase agreement with the African Vaccine
Acquisition Trust for the Company’s COVID-19 vaccine candidate

(press release)

PONVORY (ponesimod) receives positive CHMP opinion for the treatment of adults with
relapsing forms of multiple sclerosis with active disease defined by clinical or imaging features

(press release)

CAR-T Therapy Ciltacabtagene Autoleucel (Cilta-cel) accepted for accelerated assessment
in Europe for the treatment of patients with heavily pretreated multiple myeloma

(press release)

1 Subsequent to the quarter

FULL-YEAR 2021 GUIDANCE:
Johnson & Johnson does not provide GAAP financial measures on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments without unreasonable effort. These items are uncertain, depend on various factors, and could be material to Johnson & Johnson’s results computed in accordance with GAAP.

($ in Billions, except EPS)

January 2021

April 2021

Adjusted Operational Sales1,2

Change vs. Prior Year

8.0% – 9.5%

8.7% – 9.9%

Operational Sales2

Change vs. Prior Year

$88.8B – $90.0B

7.5% – 9.0%

$89.3B – $90.3B

8.2% – 9.4%

Estimated Reported Sales3

Change vs. Prior Year

$90.5B – $91.7B

 9.5% – 11.0%

$90.6B – $91.6B

9.7% – 10.9%

Adjusted Operational EPS (Diluted)2,4

Change vs. Prior Year

$9.25 – $9.45

15.2% – 17.7%

$9.30 – $9.45

15.8% – 17.7%

Adjusted EPS (Diluted)3,4

Change vs. Prior Year

$9.40 – $9.60

17.1% – 19.6%

$9.42 – $9.57

17.3% – 19.2%

1 

Non-GAAP financial measure; excludes the net impact of acquisitions and divestitures

2 

Non-GAAP financial measure; excludes the impact of translational currency

3 

Calculated using Euro Average Rate: January 2021 = $1.21 and April 2021 = $1.19 (Illustrative purposes only)

Non-GAAP financial measure; excludes intangible amortization expense and special items

Other modeling considerations will be provided on the webcast.

WEBCAST INFORMATION:
Johnson & Johnson will conduct a conference call with investors to discuss this earnings release today at 8:30 a.m., Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Johnson & Johnson website. A replay and podcast will be available approximately two hours after the live webcast in the Investors section of the company’s website at events-and-presentations.

ABOUT JOHNSON & JOHNSON:
At Johnson & Johnson, we believe good health is the foundation of vibrant lives, thriving communities and forward progress. That’s why for more than 130 years, we have aimed to keep people well at every age and every stage of life. Today, as the world’s largest and most broadly-based health care company, we are committed to using our reach and size for good. We strive to improve access and affordability, create healthier communities, and put a healthy mind, body and environment within reach of everyone, everywhere. We are blending our heart, science and ingenuity to profoundly change the trajectory of health for humanity.


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