Sundry Photography/iStock Editorial via Getty Images Johnson & Johnson (NYSE:JNJ) gained in the pre-market trading Tuesday after reporting be
Sundry Photography/iStock Editorial via Getty Images
Johnson & Johnson (NYSE:JNJ) gained in the pre-market trading Tuesday after reporting better than expected financials for Q3 2022, even as the company lowered its full-year revenue outlook amid inflationary and currency headwinds.
“Through the ongoing efforts of our teams around the world, we continue to navigate the dynamic macroeconomic environment and remain focused on delivering transformative healthcare solutions,” Chief Executive Joaquin Duato said ahead of the conference call at 8:30 a.m. EST.
Revenue for the quarter jumped ~2% YoY to $23.8B on a reported basis as international and U.S. sales grew ~12% YoY and ~4% YoY to $11.3B and $12.5B, respectively.
The pharma segment led the growth with a ~3% YoY rise in revenue backed by sales of multiple myeloma therapy Darzalex which added $2.0B globally with ~30% YoY growth.
Meanwhile, sales of Stelara, indicated for immune-mediated inflammatory disorders such as Crohn’s disease, brought $2.4B in sales indicating a ~3% YoY growth, and lymphoma drug Imbruvica added $911M sales with ~15% YoY decline.
Sales of the company’s COVID-19 vaccine dropped ~3% YoY to $489M compared to $544M in the preceding quarter.
After a ~1% YoY decline in Q2 2022, the MedTech segment bounced back to add $6.8B with ~2% YoY growth. Meanwhile, sales at the company’s consumer Healthcare segment, which JNJ expects to spin off in mid-to-late 2023, held steady at $3.8B.
While quarterly gross margin dropped to ~67% from ~69% in the prior year quarter, adj. earnings per share fell ~2% YoY to $2.55.
Citing forex headwinds, JNJ trimmed its 2022 guidance for reported sales $93.0B – $93.5B. However, the company reaffirmed reported EPS guidance at $10.02 – $10.07 despite forex impact. Meanwhile, JNJ expects its adjusted pre-tax operating margin to drop ~50 bps, a decline from the previous forecast due to the ongoing impact of inflation.
Despite a potential unfavorable impact in 2023 from higher costs of inventory manufactured in 2022, JNJ expects inflationary pressures to ease and currency headwinds to cause ~$0.40 – $0.45 impact on adjusted EPS in 2023.
Read: Last week, Seeking Alpha contributor Stephen Simpson reasoned why JNJ appeared undervalued ahead of its Q3 earnings.
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