Johnson & Johnson (JNJ) Q3 earnings report 2023

Johnson & Johnson on Tuesday reported adjusted earnings and revenue that topped Wall Street’s expectations, and lifted its full-year guidance as sales in the company’s pharmaceutical and medical devices businesses surged.

It marks J&J’s first quarterly results since it completed the separation from its consumer health spinoff Kenvue in August, the company’s biggest shake-up in its 137-year history.

Upon that separation in August, J&J also lowered its full-year sales and profit guidance. 

The drugmaker raised that revised outlook on Tuesday: J&J expects 2023 sales of $83.6 billion to $84 billion, compared with previous guidance of $83.2 billion to $84 billion in August. J&J also expects adjusted earnings per share of $10.07 to $10.13, up from a previous forecast of $10.00 to $10.10.

J&J also said it recorded a one-time, non-cash gain of $21 billion as part of the split of Kenvue.

Here’s what J&J reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: $2.66 adjusted vs. $2.52 expected
• Revenue: $21.35 billion vs. $21.04 billion expected

J&J’s stock fell nearly 1% on Tuesday. Shares of J&J have dropped nearly 11% for the year, putting the company’s market value at roughly $379 billion.

The company, whose financial results are considered a bellwether for the broader health sector, said its sales during the quarter grew 6.8% over the same period last year. 

The pharmaceutical giant reported net income of $4.31 billion, or $1.69 per share. That was flat compared with net income of $4.31 billion, or $1.62 per share, for the same period a year ago.

Excluding certain items, adjusted earnings per share were $2.66 for the period.

J&J reported $13.89 billion in pharmaceutical sales, which grew more than 5% year over year. Excluding sales of its unpopular Covid vaccine, the pharmaceutical division raked in $13.85 billion. 

Wall Street was expecting sales of $13.34 billion for the entire business segment, according to StreetAccount. The business, also known as “Innovative Medicine,” is focused on developing drugs across different disease areas.

The company said the growth was driven by sales of Darzalex, a biologic for the treatment of multiple myeloma, along with Erleada, a prostate cancer treatment, and other oncology treatments. 

J&J’s blockbuster drug Stelara, which is used to treat a number of immune-mediated inflammatory diseases, also contributed to that growth. J&J will lose patent protection on Stelara later this year. 

The company said growth was partially offset by a decline in sales of its prostate cancer drug Zytiga and blood cancer drug Imbruvica, which is co-marketed by AbbVie and will be subject to the first round of Medicare drug price negotiations. 

J&J’s Covid vaccine also weighed on pharmaceutical sales…