Johnson & Johnson first-quarter profit soared on demand for over-the-counter medicine but the company slashed its full-year sales and profits forecast.
Johnson & Johnson, the world’s biggest maker one of health care products, is the first major U.S. company to report first-quarter earnings. Its results will be viewed as a harbinger of things to come as the outbreak disrupts the global economy.
Net income in the first quarter was up from the year-ago period by nearly 57 percent to $5.8 billion or $2.17 per share. Adjusted earnings, the focus of Wall Street analysts, were $2.30 a share, above the $2.01 analysts had expected. Worldwide sales came in at $20.69 billion, a 3.3 percent increase from a year ago and above Wall Street’s expectations.
The surge in the first three months of the year was driven by a jump in demand for pain relievers, shampoo, and other household products as people around the world stocked up in order to shelter in place. Sales of consumer products, which include Tylenol and Zyrtec, rose 9.2 percent to $3.63 billion. Sales in J&J’s pharmaceuticals unit jumped 8.7 percent to $11.13 billion.
By those consumer raids on grocery stores and pharmacies will likely weigh on future sales as consumers move through their excess inventory. What’s more, consumer demand for many of the company’s products will likely fall as consumers suffer fewer bumps, scrapes, and bruises while sheltering inside.
Sales in J&J’s medical device unit sank 8.2 percent as medical procedures such as knee and hip replacements were put off during the pandemic. That decline is likely to persist or even deeper in the coming months due to the decline in elective procedures.
The company now says expects 2020 revenue of $77.5 billion to $80.5 billion, down from its January forecast of $85.4 billion to $86.2 billion. It also forecast adjusted earnings per share of $7.50 to $7.90, down from the January forecast of $9 to $9.15 per share.
The company expects costs to increase as it invests in a vaccine for the coronavirus. In March, J&J announced it expected to start trials for a vaccine by September.
“We are committed to beginning production at risk imminently and bringing an affordable and accessible vaccine to the public on a not-for-profit basis for emergency pandemic use,” Chief Executive Alex Gorsky said in a statement.
Total sales in the U.S. jumped 5.6 percent to $10.7 billion, while sales overseas edged up just 1 percent, to $9.99 billion.
Shares jumped about 4.3 percent after the opening bell.
—The Associated Press contributed to this report.