J&J (NYSE: JNJ) today reported first-quarter momentum that enabled it to up its full-year guidance.
New Brunswick, N.J.–based Johnson & Johnson also reported progress in the heavily competitive robotic surgery space.
J&J lost $68 million, or 3¢ per share, off of $24.7 billion dollars during its first quarter. A $6.9 billion talc-based baby powder litigation settlement proposal swung the company to a loss versus Q1 2022, when it earned $5.1 billion, or $1.93 per share. Revenue was up 5.6%.
Adjusted to exclude one-time items, Johnson & Johnson earned $2.68 per share. The result is 17¢ ahead of the consensus of Wall Street analysts. The Street expected EPS of $2.51 and revenue of $23.67 billion.
“With this momentum, I look forward to the remainder of the year, one filled with exciting catalysts that will create both near- and long-term value for patients and all of our stakeholders,” CEO Joaquin Duato said in a news release.
J&J MedTech revenues grew 6.4% on an adjusted basis to nearly $7.5 billion, with electrophysiology products an important growth driver. During today’s earnings call, MedTech’s EVP and Worldwide Chair Ashley McEvoy also pointed out continued innovation in the field, especially J&J’s work to innovate in pulsed-field ablation for treating AFib.
“We actually think access to radiofrequency, which has 20 plus years of safety and efficacy, coupled with the newer generation of PFA, is really gonna be the winning combo for electrophysiologists,” McEvoy said.
Johnson & Johnson’s Pharmaceutical business saw its sales grow 7.2% to $13.4 billion. A rough cold and flu season, especially in Europe, boosted the slated-to-be-spun-out Consumer Health business’ revenue 11.3% to nearly $3.9 billion.
J&J is boosting guidance
During this morning’s earnings call, J&J officials said changes in how China’s health system buys medtech continue to impact results. Supply chain disruption continues to have an effect, too.
There was no mention in today’s announcement and earnings call of the layoffs and reorganizations that have recently taken place in J&J MedTech.
On the flip side, Johnson & Johnson reports that its integration with Abiomed — acquired for $16.6 billion in December 2022 — continues to progress.
For the full-year 2023, Johnson & Johnson expected operational sales of $97.9–98.9 billion and adjusted EPS of $10.60–10.70. The projection is up from the company’s previous guidance of operational sales of $96.9–97.9 billion and adjusted EPS of $10.45–10.65.
BTIG analysts thought the results were encouraging overall.
Investors reacted by sending JNJ shares up more than down more than 2% to $161.25 apiece by midday trading. MassDevice‘s MedTech 100 index, which includes stocks of the world’s largest medical device companies was down slightly.
Johnson & Johnson reports robotic surgery progress
There have been questions around Ottava — which represents J&J’s bid to compete with Intuitive in the soft-tissue robotic surgery space. Just under one year after unveiling Ottava in 2020, the company said it experienced a “temporary setback” with the system, resulting in a two-year delay in its development timeline.
More uncertainty arose as layoff notices filed in California in March confirmed that Johnson & Johnson is letting go of nearly 350 employees in the surgical robotics space. The notices list layoffs involving 292 workers at Auris, 47 at Verb Surgical, and four at Ethicon Endo-Surgery. All of the jobs were based in Santa Clara County.
During today’s call, however, McEvoy reported that Ottava is progressing significantly. The company plans to share more information during the second half of the year.
The company earlier this year announced the first robotic-assisted removal of kidney stones using the company’s multi-specialty flexible Monarch robotic platform, which is cleared for bronchoscopy and endourological procedures.
In addition, J&J this month secured a CE Mark for its Velys robot-assisted total knee replacement system, which McEvoy described as the fastest-growing knee robotic system in the United States. “We’ve completed over 20,000 procedures, and we’re taking this system’s approach to our business in hips, to shoulders and to spine.”