Pharmaceutical and Medical Technology Group Johnson & Johnson (J&J) Lowers Profit Forecast for Current Year Due to High Acquisition Costs, Including Billion-Dollar Purchase of US Medical Technology Manufacturer Shockwave. Despite Costs, J&J Remains Optimistic About Sales Growth.
The company now expects an adjusted operating profit of $10.00 to $10.10 per share for 2024. In April, J&J had given a forecast for a profit range of $10.60 to $10.75. The costs of the acquisitions significantly exceed the profit contribution from improved performance.
In the second quarter, Johnson & Johnson posted a post-tax profit of nearly $4.7 billion (€4.3 billion), representing a decline of almost 13 percent compared to the previous year. However, adjusted for special items, earnings per share increased by ten percent to $2.82, exceeding analysts' expectations. Revenue climbed by 4.3 percent in the same period to just over $22.4 billion.
Johnson & Johnson now expects revenue to increase to $89.2 to $89.6 billion for the full year. Previously, the company had targeted up to $89.1 billion. In June, J&J acquired the biotech company Proteologix and in July, the rights for the bispecific antibody NM26 from Numab Therapeutics.
Last year, Johnson & Johnson separated from its consumer goods business, which includes brands like Carefree and Neutrogena, and spun it off under the name Kenvue. This move is intended to enhance the focus on higher-margin products. However, with the imminent expiration of the patent protection for the psoriasis drug Stelara in Europe, the company is facing increasing competition from generic alternatives. Stelara is considered one of the top revenue generators for the US company.
Johnson & Johnson continues to seek a settlement with plaintiffs claiming health damages from asbestos-contaminated talcum powder. J&J now offers the affected parties a settlement worth around $11 billion (10.3 billion euros). Two previous attempts at a settlement failed as plaintiffs demanded more money. The lawsuits primarily relate to the body powder "Baby Powder," which many women hold responsible for ovarian cancer. Other manufacturers of baby, foot, and other powders in the USA also face similar lawsuits due to harmful ingredients.
The stock of Johnson & Johnson closed 3.69 percent higher on the NYSE at 156.58 USD.
