Johnson & Johnson tops 1Q profit forecasts

The logo of healthcare company Johnson & Johnson is seen in front of an office building in Zug Switzerland

And while Johnson & Johnson raised its guidance for the year, the more optimistic outlook was due to its pending acquisition of Achtelion. J&J also benefited from several smaller acquisitions and from the ongoing restructuring of its medical device segment, begun in early 2016.

As the earnings date approaches, we can see that insider ownership is now 0.02% shares, and institutional ownership is at 67.40% for Johnson & Johnson (NYSE:JNJ) stock. Johnson & Johnson also was the target of unusually large options trading on Tuesday.

Meanwhile, Johnson & Johnson in the first quarter of FY 17 has reported the adjusted earnings per share of $1.61, missing the analysts' estimates for the adjusted earnings per share of $1.76.

On a per-share basis, the New Brunswick, New Jersey-based company said it had profit of $1.61. The company had revenue of $18.10 billion for the quarter, compared to analysts' expectations of $18.28 billion.

Worldwide Pharmaceutical sales of $8.2 billion for the first quarter 2017 represented an increase of 0.8% versus the prior year with an operational increase of 1.4% and a negative impact from currency of 0.6%. The drugs sales declined by 6% during the quarter but much of that came from decline in exports. He said J&J hasn't seen "much of an impact" so far from Pfizer's biosimilar version, which went on sale late a year ago. Revenue was up just 1.6% to $17.77 billion, which was about half of the growth rate investors had wanted to see. Johnson & Johnson has a one year low of $109.32 and a one year high of $129.00. With other medicines slowing down, J&J made a bold bet in January with the $30 billion purchase of Swiss drugmaker Actelion, a leader in treatments for a rare type of high blood pressure that fulfills its goal of gaining a new drug category. Wells Fargo & Co downgraded Johnson & Johnson from an "outperform" rating to a "market perform" rating and boosted their price target for the company from $112.28 to $112.80 in a research note on Thursday, January 26th.

Falling prices and stiff competition has forced Johnson & Johnson to consider selling its diabetes care business. The U.S. Food and Drug Administration is working on interchangeability guidelines, but they're not ready yet.

Johnson and Johnson raised its full-year earnings forecast to the $7 to $7.15 per share range.

Heading into the earnings release, covering sell-side analysts have a consensus target price of $128.56 on Johnson & Johnson shares. As a result, it expects Q2 EPS of $7.00 to $7.15, while analysts are looking for $7.08.

The Actelion acquisition is expected to close in the second quarter, and J&J has increased its sales guidance to between $75.4 billion and $76.1 billion.

Now, the FactSet Research estimate calls for Q1 2017 earnings of US$1.77.

Johnson & Johnson is a holding company, which is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. Eagleclaw Cap Managment Limited Liability Company reported 0.78% of its portfolio in Johnson & Johnson (NYSE:JNJ).

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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