Johnson & Johnson’s net profit up 3.2% on strong pharmaceuticals business

Johnson & Johnson’s net profit jumped 3.2 per cent on an annual basis in the third quarter underpinned by a strong growth in the pharmaceuticals and consumer health businesses.

Net profit surged to $3.7 billion in the three months ending September 30, from the same period a year earlier. However, it was down 41.5 per cent from the previous quarter, when it earned $6.3bn.

Revenue during the quarter increased 10.7 per cent on an annual basis to $23.3bn, missing the analysts’ expectations for $23.7bn.

“Our third-quarter results demonstrate solid performance … driven by robust above-market results in pharmaceuticals, ongoing recovery in medical devices and strong growth in consumer health,” said Alex Gorsky, chairman and chief executive of the company.

J&J’s stock was up 2.4 per cent on Tuesday, trading at $163.8 per share.

The New Jersey company earned more than 55 per cent of its revenue from the pharmaceutical business that developed the single-shot Covid-19 vaccine. The division added nearly $13bn, 13.8 per cent more year-on-year, to the overall sales in the July-September period.

Its consumer health business, which makes products such as Neutrogena face wash and Listerine, constituted nearly 15.8 per cent or $3.7bn of the overall sales during the quarter.

Its medical devices business, which suffered badly last year because of the pandemic as many hospitals postponed medical procedures or surgeries, earned $6.6bn in the three months constituting nearly 28.4 per cent of the overall revenue.

J&J said its Covid-19 vaccine sales reached $502 million in the third quarter. It expects the Covid vaccine sales for the year to reach $2.5bn.

J&J also increased its earning guidance for the full financial year.

Its full-year earnings estimate is to be between $9.7 and $9.8 per share, from its earlier guidance of $9.6 to $9.7 per share. Its overall sales could range from between $94.1bn and $94.6bn, up from its previous estimate of $93.8bn to $94.6bn, J&J predicted.

Owing to the evolving marketplace dynamics resulting from the effects of Covid-19, J&J has “demonstrate[d] the responsiveness and agility required to meet the needs of our stakeholders”, said Mr Gorsky, pointing out the company has invested in a “pipeline of innovation and key commercial platforms” to drive its future growth.

“I am incredibly proud of our company’s transformative growth over the past decade,” said Mr Gorsky, who is stepping down from the post of chief executive in January and will be replaced by Joaquin Duato, vice chairman of the company’s executive committee.

Earlier this month, J&J asked the US Food and Drug Administration to authorise a second dose of its Covid-19 vaccine for adults after a study indicated it provided strong protection against the coronavirus.

Last week, a 19-member FDA advisory panel unanimously voted to recommend a second J&J shot for emergency use authorisation. The FDA is expected to make a final decision in the coming days.

If approved, nearly 15 million people in the US who have received the J&J shot will get the booster jab.