Johnson & Johnson
(NYSE: JNJ)
shares dipped slightly today, even as first-quarter earnings came in ahead of the consensus forecast.
Shares of JNJ fell 1% to $145.16 apiece by mid-day trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — fell slightly.
The New Brunswick, New Jersey-based medtech giant reported profits of $5.4 billion for the quarter. That equals $2.20 per share on sales of $21.4 billion for the quarter ended March 31, 2024.
J&J recorded a massive bottom-line gain from losses of $491 million this time a year ago. It posted a sales uptick of 2.3% as well.
Adjusted to exclude one-time items, earnings per share came in at $2.71. That landed 7¢ ahead of expectations on Wall Street. Sales equaled projections as experts forecast $21.4 billion in revenue.
Johnson & Johnson MedTech brought in $7.8 billion of that overall revenue, good for year-over-year growth of 4.5%. (Innovative Medicine saw nearly $13.6 billion in revenue, up 1.1%.)
The company said electrophysiology products and Abiomed in its Cardiovascular unit drove medtech sales, along with wound closure products in the General Surgery business.
“Johnson & Johnson’s solid first-quarter performance reflects our sharpened focus and the progress in our portfolio and pipeline,” said Joaquin Duato, J&J chair and CEO. “Our impact across the full spectrum of healthcare is unique in our industry, and the milestones achieved this quarter reinforce our position as an innovation powerhouse.”
More growth on the way for J&J MedTech
J&J plans to enhance its medtech portfolio even more through its planned $13.1 billion acquisition of Shockwave Medical, a deal announced earlier this month. Company officials see the deal closing by midyear.
“The acquisition of Shockwave, with its leading intravascular lithotripsy or IVL technology, will provide us with a unique opportunity to impact coronary artery and peripheral artery disease, two of the highest-growth, innovation-oriented segments within cardiovascular intervention,” J&J CFO Joseph Wolk said during the company’s earnings call with analysts today.
Recent news for Johnson & Johnson MedTech also includes FDA submission for approval of its Varipulse pulsed field ablation system, which already has regulatory nods in Europe and Japan. In addition, the company has filed for a CE mark in the EU for its SmartTouch SF dual energy catheter, which can toggle between pulsed field and radiofrequency ablation to treat AFib.
The company’s revenue outlook for 2024 rose slightly, with sales expected to range between $88.7 billion and $89.1 billion. That marks a small uptick from the previous projection for between $88.2 billion and $89 billion. However, the company narrowed its adjusted EPS guidance to between $10.57 and $10.72. It previously forecast between $10.55 and $10.75.
J&J officials highlighted the money the company is steering toward R&D.
“Looking ahead, we have many important catalysts in the pipeline that will drive meaningful near and long-term growth across both Innovative Medicine and MedTech,” Wolk said.
The analysts’ take on Johnson & Johnson
BTIG analysts Ryan Zimmerman and Iseult McMahon said in a report that the company expects its MedTech procedure volumes to remain above pre-COVID levels. Notably, they say J&J remains on track to submit its Ottava surgical robot for FDA investigational device exemption (IDE) in the second half of this year.
The company last offered an Ottava update last November, providing a potential timeline for the highly anticipated surgical robot.
Zimmerman and McMahon also highlighted softer trauma growth for J&J’s orthopedic business, highlighting procedure dynamics and competitive pressure. They say they view the results as mixed for competitor Stryker, in particular.
Within the company’s Spine business, the analysts say the J&J results suggest healthy procedure volumes despite competitive losses. They view that as a positive for both the company and its broader competition within the spine market. That includes, in particular, Medtronic, Globus Medical, Alphatec,, OrthoFix and Xtant Medical, among others.
Mike Matson, senior research analyst at Needham & Co., was also positive about J&J MedTech: “We believe that the JNJ Med Tech business performance indicates overall Med Tech market growth should remain strong through 2024.”
Editor-in-chief Chris Newmarker contributed to this report.
