Johnson & Johnson earnings rose 73% in the second quarter, thanks to strong sales growth across all businesses as hospitals and the rest of the healthcare industry continued to recover from the effects of the coronavirus pandemic.
The healthcare giant slightly exceeded Wall Street’s expectations and significantly increased its sales and profit guidance for 2021.
The world’s largest health care product maker on Wednesday reported net earnings of $ 6.28 billion, or $ 2.35 per share, for the second quarter, down from $ 3.63 billion, or $ 1.36 per share last year.
Adjusted income was $ 6.63 billion, or $ 2.48 per share, beating Wall Street forecast of $ 2.28 per share.
Revenue was a whopping $ 23.31 billion, up 27.1% from Q2 2020.
The only weak point was dismal sales of J & J’s COVID-19 vaccine, which grossed just $ 164 million for the quarter and $ 264 million so far this year.
The vaccine was plagued by concerns about some very rare side effects and the closure of J & J’s US contract manufacturer Emergent BioSolutions’ Maryland factory due to contamination problems that resulted in tens of millions of doses of vaccine being discarded. It’s unclear when – or if – the U.S. Food and Drug Administration will allow the factory to resume production, which ceased in mid-April.
J&J has the only approved vaccine that requires vaccination only, so it was expected to play a huge role in vaccinating people in rural areas and developing countries. Instead, the company has fallen far short of its delivery commitments to the United States, other governments, and a World Health Organization-sponsored program to provide affordable vaccines to poor and middle-income countries. However, J&J recently received approval to manufacture more vaccine doses at its newly expanded factory in the Netherlands.
Company executives said they expect total COVID-19 vaccine sales in 2021 to be approximately $ 2.5 billion, mostly in the fourth quarter.
“We hope this will be the beginning of what we will grow into a dynamic vaccines business over time,” Jennifer Taubert, president of the Prescription Drugs business line, told analysts on a call to discuss the quarterly results.
Johnson & Johnson noted that recent studies show that the vaccine works well against variants of coronavirus and protects people for at least eight months. The company announced that it is selling its vaccine on a nonprofit basis for $ 5 to $ 8 per dose.
J&J, based in New Brunswick, New Jersey, said foreign sales rose 29.5% to $ 11.39 billion, while U.S. sales rose 24.9% to $ 11.92 billion is.
J & J’s medical device and diagnostics division had been a straggler in the face of lengthy restructuring and the pandemic that resulted in people delaying planned surgeries and other treatments. It had its best performance of the quarter with revenue increasing 62.7% to $ 6.98 billion.
Still, the company warned that some U.S. hospital systems are delaying elective procedures again as infections and hospital stays increase amid the recent surge caused by the highly transmissible Delta variant.
Cancer drug maker Darzalex and Imbruvica reported that prescription drug sales, which have long been the company’s top growth driver, rose 17.2% to $ 12.6 billion.
Sales of consumer health products like Tylenol and patches, boosted by drug cabinet stockpiling and an increased focus on wellness during the pandemic, rose 13.3% to $ 3.74 billion.
“The company’s earnings growth has accelerated, driven by newly introduced drugs and a diminishing impact from patent losses,” Edward Jones analyst Ashtyn Evans wrote to investors, adding that the current share price does not fully reflect the growth of J & J’s new products .
Evans, who ran the recent headlines over lawsuits over J & J’s talc products and a possible $ 5 billion settlement
Total sales benefited 4.1% from favorable exchange rates. During the quarter, J & J’s effective tax rate dropped to 5.8%, and the company paid dividends of $ 2.8 billion to shareholders.
During the quarter, the FDA approved J & Js Rybrevant, the first targeted treatment for non-small cell lung cancer that contains certain genetic mutations.
Johnson & Johnson expects adjusted earnings for the full year in the range of $ 9.60 to $ 9.70 per share, up from its April guidance of $ 9.42 to $ 9.57. The company expects sales between $ 93.8 billion and $ 94.6 billion, down from $ 90.6 billion to $ 91.6 billion.
In the afternoon session, J&J shares rose 82 cents to $ 169.27.
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