Yahoo Finance J&J (JNJ) Q4 Earnings Beat Estimates by a Penny, Sales Miss
Johnson & Johnson’s JNJ fourth-quarter 2021 earnings came in at $2.13 per share, which beat the Zacks Consensus Estimate of $2.12 by a penny. Earnings increased 14.5% from the year-ago period.
Adjusted earnings exclude intangible amortization and some other special items. Including these items, J&J reported fourth-quarter earnings of $1.77 per share, up 172.3% from the year-ago quarter.
Sales of this drug and consumer products giant came in at $24.8 billion, which slightly missed the Zacks Consensus Estimate of $25.3 billion. Sales rose 10.4% from the year-ago quarter, reflecting an operational increase of 11.6% and a negative currency impact of 1.2%.
Organically, excluding the impact of acquisitions and divestitures, sales rose 12.3% on an operational basis compared with a 10.6% increase seen in the previous quarter.
Fourth-quarter sales in the domestic market rose 3% to $12.16 billion. International sales rose 18.5% on a reported basis to $12.64 billion, reflecting an operational increase of 21.2% and a negative currency impact of 2.7%. Excluding the impact of all acquisitions and divestitures, on an adjusted operational basis, international sales rose 22.4% in the quarter.
Segment Details
Pharmaceutical segment sales rose 16.5% year over year to $14.29 billion, reflecting 17.9% operational growth and 1.4% negative currency impact. Excluding the impact of all acquisitions and divestitures, on an operational basis, worldwide sales rose 18.6%. The Pharmaceutical segment sales were a little short of the Zacks Consensus Estimate of $14.58 billion.
The sales increase was led by higher penetration and new indications across key products, such as Darzalex and Stelara. Other core products like Invega Sustenna and new drugs, Erleada and Tremfya contributed significantly to sales growth. J&J’s single-dose COVID-19 vaccine also contributed to sales growth. However, the sales growth was dampened by lower sales of key medicine, Imbruvica and generic/biosimilar competition to drugs like Zytiga and Remicade.
Darzalex sales rose 31.4% year over year to $1.65 billion in the quarter. Stelara sales grew 4% to $2.33 billion in the quarter. Stelara sales were below the Zacks Consensus Estimate of $2.46 billion.
Imbruvica sales declined 5% to $1.06 billion. J&J markets Imbruvica in partnership with AbbVie ABBV.
COVID-19 impacts on new patient starts and modest share loss in the United States to new oral competition have been hurting sales of J&J and AbbVie’s Imbruvica for the past couple of quarters.
PAH revenues of $851 million declined 1.6% year over year. Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales rose 6.5% to $1.03 billion in the quarter. Simponi/Simponi Aria sales declined 3.2% to $559 million while Prezista sales decreased 9.3% to $515 million.
Xarelto sales rose 2.5% in the quarter to $644 million while sales of Invokana/Invokamet declined 45.1% to $120 million.
Among the newer medicines, Erleada generated sales of $384 million in the quarter, up 59.8% year over year. Tremfya recorded sales of $693 million in the quarter, up 81.5% year over year.
Zytiga sales declined 11.8% to $548 million in the quarter due to generic competition. Sales of Procrit/Eprex declined 12.9% to $113 million in the quarter due to biosimilar competition. Sales of Remicade were down 15.2% in the quarter to $764 million.
J&J’s single-dose COVID-19 vaccine generated sales of $1.62 in the fourth quarter compared with $502 million in the third quarter. A booster shot of the vaccine was authorized in October 2021 which may have contributed to higher sales. Please note that J&J is selling its vaccine on a not-for-profit basis.
Medical Devices segment sales came in at $6.86 billion, up 4.1% from the year-ago period, reflecting an operational increase of 5.3% and a negative currency movement of 1.2%.
Excluding the impact of all acquisitions and divestitures, on an operational basis, worldwide sales rose 5.6%.
The Consumer segment recorded revenues of $3.66 billion in the reported quarter, up 1.1% year over year, reflecting a 1.8% operational increase and 0.7% negative currency impact.
Excluding the impact of acquisitions and divestitures, adjusted operational sales rose 2.9% worldwide.
2021 Results
Full-year 2021 sales rose 13.6% to $93.8 billion, missing the Zacks Consensus Estimate of $94.2 billion. Sales were slightly below the guided range of $94.1 billion - $94.6 billion.
Adjusted earnings for 2021 were $9.80 per share, which were in line with the Zacks Consensus Estimate and up 22% year over year. Earnings were within the guided range of $9.77-$9.82.
2022 Outlook
J&J issued its financial guidance for 2022.
Sales are expected to be in the range of $98.9 billion-$100.4 billion. The Zacks Consensus Estimate for sales is pegged at $98.45 billion. The sales range indicates a year-over-year increase of 5.5%-7.%. The guidance includes $3.0 billion - $3.5 billion in revenues from the COVID-19 vaccine.
Excluding revenues from the COVID-19 vaccine, the base business is expected to generate revenues in the range of $95.9 billion to $96.9 billion.
Operational constant-currency sales are expected to increase in the range of 7%-8.5% (including the COVID vaccine). Excluding the COVID-19 vaccine, operational constant-currency sales are expected to increase in the range of 6.5%-7.5%.
The adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth guidance is the same as operational constant-currency sales discussed above.
Adjusted earnings per share are expected in the range of $10.40-$10.60. The Zacks Consensus Estimate for earnings was $10.25 per share.
The earnings range indicates an increase of 6.1%-8.2%. On an operational, constant-currency basis, adjusted earnings per share are expected to increase 8.2%-10.2%.
Our Take
J&J reported mixed fourth-quarter results as it beat estimates for earnings but missed the same for sales. Its Pharmaceuticals unit sales fell slightly short of expectations. Its COVID-19 vaccine generated $2.39 billion in sales for the company in 2021. The Medical Devices segment benefited from an ongoing recovery after its sales were hurt significantly in the early stages of the pandemic. However, delayed procedure volumes due to rising infection rates is hurting sales somewhat in the Medical Devices segment. Sales of the Consumer segment continued to improve.
Its financial guidance for 2022 was well within investor expectations.
However, J&J’s shares were down slightly in pre-market trading on the weaker-than-expected revenues in the quarter. In the past year, J&J’s shares have risen 0.6% compared with the industry’s 11.8% growth.
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In November 2021, J&J announced plans to separate its Consumer Health segment into a new publicly-traded company, leaving behind a new J&J with its Pharmaceuticals and Medical Device units. It remains to be seen how the new chief executive officer, Joaquin Duato, navigates the company through this big change.
J&J currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Some better-ranked large stocks are Pfizer PFE and Eli Lilly LLY. While Pfizer has a Zacks Rank of 1 (Strong Buy), Lilly has a Zacks Rank #2 (Buy).
Pfizer’s stock has risen 43.7% in the past year. Estimates for Pfizer’s 2022 earnings have gone up from $3.86 to $5.80 over the past 60 days.
Pfizer’s earnings performance has been mixed, with the company exceeding earnings expectations in three of the last four quarters while missing in one. PFE has a four-quarter earnings surprise of 10.85%, on average.
Lilly’s stock has risen 14.9% in the past year. Estimates for Lilly’s 2022 earnings have gone up from $8.28 to $8.41 over the past 60 days.
Lilly’s earnings performance has been rather weak with the company exceeding earnings expectations in just one of the last four quarters. Lilly has a four-quarter earnings surprise of 0.54%, on average.
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