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Johnson & Johnson Beats Street Views; Ups Revenue Guidance

Health products and pharmaceutical giant Johnson & Johnson (NYSE: JNJ – $132.80) reported adjusted earnings per share of $2.58 compared to $2.10 a year ago and beating the consensus of $2.46. Revenue fell to $20.562 billion from $20.830 billion in the year-earlier quarter but beat Street views of $20.293 billion. Sales from J&J’s Consumer business rose 1.2% to $3.544 billion as a 4.1% gain in the U.S. was offset by a 1% decrease in international sales for the group. Pharmaceutical revenue was up 1.7% to $10.5 billion as international sales jumped 6.5% but U.S. was down 2%. Medical Devices sank 6.9% with declines in both the U.S. and internationally to bring revenue for the segment to $6.49 billion. J&J boosted its 2019 sales outlook to between $80.8 billion and $81.6 billion from between $80.4 billion and $81.2 billion. The company also reaffirmed its full-year adjusted earnings guidance of between $8.53 and $8.63 per share.

       The company remains embroiled in legal issues with talcum powder and opioid related claims. However, J&J feels confident it can overcome these issues, although the cost of defending itself is high. For the long-term, shares in JNJ should continue to move higher but with wide swings on headline news such as we are seeing recently. The drug pipeline remains strong and management is continuing to make investments in research and potential bolt-on acquisitions. The shares yield 2.8% at current levels.


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