Johnson & Johnson’s profit tanks 35% in Q2 as COVID-19 delays elective surgeries
- Johnson & Johnson’s profit tanks 35% in Q2 as COVID-19 delays elective surgeries.
- J&J tops analysts' estimates for earnings and revenue in the fiscal second quarter.
- The U.S. company is currently committed to developing a treatment for COVID-19.
Johnson & Johnson (NYSE: JNJ) published its quarterly results on Thursday that highlighted a 35% year over year decline in its profit in the fiscal second quarter. The company attributed the decline to the Coronavirus pandemic that minimised elective surgeries in recent months and weighed on J&J’s medical device business.
Shares of J&J remained flat in premarket trading on Thursday. The company that has a market capitalisation of £310.77 billion and a price to earnings ratio of 23.13 is currently more than 1% up year to date in the stock market.
Johnson & Johnson’s Q2 financial results versus analysts’ estimates
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According to Refinitiv, experts had forecast the company to print £14 billion in revenue in the second quarter. Their estimate for earnings per share (EPS) was capped at £1.19. In its report on Thursday, J&J topped both estimates posting a higher £14.56 billion in revenue and £1.33 of adjusted earnings per share in Q2.
At £2.89 billion, the American multinational corporation’s net income in the second quarter came in significantly lower than £4.46 billion in the same quarter last year. On a year over year basis, its revenue was also reported about 10% down in Q2. Johnson & Johnson suspended plans of buying Takeda Pharmaceutical’s TachoSil in April.
Following the hawkish performance, the New Brunswick-based company upwardly revised its guidance for the full year. It now expects £6.17 to £6.33 of adjusted earnings per share. It expects full-year sales to now lie in the range of £63.57 billion to £64.76 billion. A U.S. court penalised Johnson & Johnson by £1.69 billion in June.
Other prominent figures in Johnson & Johnson’s earnings report
Other prominent figures in J&J’s earnings report on Thursday include a 2.1% annualised increase in revenue from its pharmaceutical business that is currently committed to developing an effective treatment for COVID-19. Its consumer unit, on the other hand, registered £2.55 billion in revenue in the second quarter that represents a 7% decline versus the year-ago figure.
Its medical-device unit, J&J added, generated £3.34 billion of sales in Q2 that marks a 33.9% decline as compared to the same quarter last year.
According to CEO Alex Gorsky of J&J:
“Our second results reflect the impact of COVID-19 and the enduring strength of our Pharmaceutical business, where we saw continued growth even in this environment. Thanks to the tireless work of our colleagues around the world and our broad range of capabilities, we continue to successfully navigate the external landscape, and we remain focused on advancing the development of a vaccine to help address this pandemic and save lives.”