J&J raises financial guidance for 2020 despite pandemic

Johnson & Johnson boosted its financial guidance for the year, a sign the health-care giant believes it can successfully navigate the strains placed on the industry by the pandemic.

But its second-quarter profit was weaker than analysts had expected. After reining in its outlook earlier this year, the company said it now expects adjusted earnings for the full year of $7.75 to $7.95 a share, and revenue of $81bn to $82.5bn. At a time when the pandemic has frustrated Wall Street’s efforts to accurately forecast corporate profits and sales, J&J’s second-quarter revenue fell 11% from a year earlier to $18.3bn, beating analysts’ expectations of $17.6bn. Adjusted earnings per share were $1.67, down from $2.58 a year earlier, but topping the average estimate of $1.50.J’s pharmaceutical business helped bolster overall sales in the quarter. Branded-drug segment sales topped $10.75bn, marking 2.

CEO Alex Gorsky said the quarter reflected the “enduring strength of the pharmaceutical business, where we saw continued growth even in this environmentBut sales of medical devices sank, falling 39% to $4.2bn as elective surgeries were delayed due to the pandemic. That still managed to top Wall Street’s more dire estimates of $3.4bn.

In June, J&J announced it was accelerating development of its coronavirus vaccine based on the strength of preclinical data, which will be published soon. The shot will launch into human trials in the second half of July, and the company is aiming for a final-stage trial in mid-September.The shares were down 0.3% in New York on Thursday. By the end of Wednesday, they had gained 1.6% in 2020.

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