UPDATED April 17, 2018, with medical device division results.
Johnson & Johnson (NYSE:JNJ) today reported first-quarter sales and earnings that topped the consensus forecast on Wall Street, despite lower profit numbers, and said it plans to make changes to its supply chain that could save as much as $800 million annually.
The New Brunswick, N.J.-based healthcare giant posted profits of $4.37 billion, or $1.60 per share, on sales of $20.0 billion for the three months ended March 30, for a bottom-line slide of -1.2% on sales growth of 12.6% compared with Q1 2017.
Adjusted to exclude one-time items, earnings per share were $2.06, 5¢ ahead of Wall Street’s consensus, where analysts were looking for sales of $19.38 billion.
“Our pharmaceutical business continues to deliver robust growth and we are pleased with the improvement in our consumer business. In our medical devices businesses, we have areas of leadership and continue to make investments and portfolio choices to improve performance,” chairman & CEO Alex Gorsky said in prepared remarks. “The U.S. tax legislation passed late last year is creating the opportunity for us to invest more than $30 billion in R&D and capital investments in the U.S. over the next four years, which is an increase of 15%.”
J&J also said it’s planning changes to its global supply chain as it eyes pre-tax savings of $600 million to $800 million by 2022.
The company affirmed its adjusted EPS outlook for 2018, for $8.00 to $8.20, but raised its sales forecast to $81.0 million to $81.8 billion, compared with $80.6 billion to $81.4 billion previously.
JNJ shares were up 0.7% to $132.74 apiece today in pre-market trading.
Medical device business posts 8% top-line gain
Johnson & Johnson said its medical device business grew sales 7.5% to $6.77 billion, powered by international sales growth of 12.7% to $3.61 billion; U.S. medical device sales grew 2.2% to $3.16 billion.
The surgery segment, the company’s largest medtech division by sales, reported sales of $2.42 billion, up 6.7%, followed by a -1.1% decline for its second-largest unit, orthopedics, which came in at $2.25 billion.
J&J Vision, driven by the January 2017 acquisition of Abbott Medical Optics for $4.33 billion, posted 39.7% growth to $1.12 billion.
Interventional solutions reported sales of $640 million, up 16.6%. The company, which is in the process of jettisoning large chunks of its diabetes business, said sales there were off -15.0% to $339 million.