Johnson & Johnson Forecasts Weak Annual Profit, Misses Revenue Estimates
Johnson & Johnson has forecast 2020 profit to fall below Wall Street estimates, adding that increased competition could somewhat limit growth in its top-earning pharmaceuticals unit.
Shares of the healthcare conglomerate fell nearly 2% to $146.62 after it reported a rare miss on quarterly revenue, as sales came in below lofty Wall Street estimates.
J&J's pharmaceuticals unit, which makes up half of the company's overall sales, has powered much of its recent growth.
Chief Financial Officer Joseph Wolk said the company still expects sales growth to accelerate in 2020, but it will "probably not be as robust as we would have thought this time last year."
He said J&J did not take as big a hit from generic and biosimilar competition in 2019 as feared, and that the company hoped its off-patent branded products could maintain market share into 2020.
J&J expects full-year 2020 adjusted earnings of $8.95 to $9.10 per share, with a midpoint below current analysts' average estimates at the top of the range.
Pharmaceutical sales rose 3.5% to $10.55 billion in the fourth quarter, but failed to reach Wall Street estimates of $10.63 billion, according Refinitiv data.
Overall sales rose 1.7% to $20.75 billion, below the average analyst estimate of $20.80 billion, marking the company's first revenue miss in at least eight quarters.
The company said it will not actively participate in a U.S. Food and Drug Administration hearing early next month to discuss testing methods for talc.
"We certainly welcome any discussion around the safety and efficacy of the product... I can say that our current internal testing methods exceed that of current FDA standards for cosmetic talc," Wolk said.