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Cancer drug sales help Johnson & Johnson withstand the hit from a stronger dollar

Johnson & Johnson (NYSE: JNJ) recorded quarterly results that surpassed financial analyst estimates in large part because of the strength of its pharmaceutical department, even as it cut its annual adjusted forecast because of a stronger dollar.

Johnson & Johnson joins other major multinationals in the United States, including IBM and Microsoft, warning of a hit from the United States currency’s current strength. This year through to July the U.S dollar has risen 12% and analysts expect it to stay strong for about the next 90 days.

Business highlights 

The company’s pharmaceutical department, Johnson & Johnson’s biggest unit, has recorded strong financial results in the last couple of quarters, even with delayed surgical processes negatively impacting sales growth at its medical devices department during the COVID pandemic.

Double-digit sales growth of the company’s cancer drug Darzalex and Stelara, its Crohn’s disease drug, helped Johnson & Johnson beat analyst estimates for Q2 profit. The company recorded total sales of about $24.02 billion representing a 3% increase, with almost half coming from outside the country. According to Refinitiv’s IBES data, analysts expected the company to record $23.77 billion in sales.

On an adjusted basis, Johnson & Johnson earned around $2.59 per share, surpassing the $2.54 per share analyst estimate. Stelara drug sales came to about $2.60 billion representing a 14.3% increase, while Darzalex revenue was around $1.99 billion, representing a staggering 40% increase.

The company’s COVID-19 vaccine, which is currently experiencing a slow uptake and weak demand, brought in revenue of $544 million in the quarter. J&J shares rose to $175.85 representing an increase of almost 1% in premarket trading.

How did management feel?

Joseph Wolk, the company’s Chief Finance Officer, in an interview with CNBC blamed the forecast drop wholly on the fluctuations of the U.S currency, pointing to the difference between the euro and the dollar.

The company now expects an adjusted full-year profit of $10.10 per share from a flat $10, compared to the prior $10.35 per share from $10.15.  

The post Cancer drug sales help Johnson & Johnson withstand the hit from a stronger dollar appeared first on Invezz.

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