The highly anticipated earnings report of Johnson & Johnson is scheduled for Tuesday. This report carries added significance as it marks the beginning of the company’s first full year since the separation from its consumer health division known as Kenvue. The split-off was finalized in late August, resulting in Johnson & Johnson specializing solely in branded prescription pharmaceuticals and medical devices.
As the pioneer Big Pharma company to release its earnings for the fourth quarter of 2023, Johnson & Johnson’s report is set to have a profound impact on the upcoming earnings season. Consequently, it is being closely monitored by industry experts.
This month, managed care companies Humana and UnitedHealth Group revealed that U.S. seniors enrolled in their Medicare Advantage programs utilized healthcare services more than expected in the fourth quarter. This news could potentially benefit medical device manufacturers like Johnson & Johnson. The company’s products play a crucial role in surgical procedures conducted at hospitals.
Financial analysts project that Johnson & Johnson will announce earnings of $2.28 per share for the fourth quarter of 2023, according to FactSet. Additionally, sales are anticipated to reach $21 billion.
Company Provides 2024 Fiscal Year Guidance
Johnson & Johnson recently outlined its preliminary guidance for the 2024 fiscal year in an investor presentation held in December. The company anticipates adjusted operational earnings in the range of $10.55 to $10.75 for the year, with sales growth expected to be between 5% and 6%.
Steady Growth in Johnson & Johnson Shares
Despite challenges faced by various industries, Johnson & Johnson’s shares have performed well, showing a 3.6% increase since the beginning of this year. However, over the past 12 months, shares have experienced a moderate decline of 3.5%.
In a recent note, J.P. Morgan analyst Chris Schott expressed confidence in the upcoming fourth-quarter report, highlighting that the company had provided an updated financial outlook earlier in December. Schott does not anticipate any significant surprises.
Positive Outlook for Core Drivers
Schott believes the fourth quarter will be strong, as he observes positive trends for core drivers within Johnson & Johnson’s Pharma portfolio and notes the presence of healthy end markets for MedTech.
Lingering Litigation Concerns
One area of concern for the company is ongoing litigation related to claims from consumers who allege harm caused by Johnson & Johnson’s talc products. The company maintains its stance that its talc products are safe and free from causing cancer. Despite repeated attempts to transfer these claims into the bankruptcy system, the litigation continues to burden the company without resolution.
Investor Call Scheduled
To address investor queries and provide further insights, Johnson & Johnson has scheduled an investor call on Tuesday at 8:30 a.m.