Strong Q2 from J&J as pandemic-hit sales, profit recover

Johnson & Johnson’s second-quarter profit soared 73%, thanks to strong sales growth across all of its businesses, particularly its medical device and diagnostics segment, as hospitals and the rest of the health care industry continued recovering from the effects of the coronavirus pandemic.

The health care giant also got a boost from favorable currency exchange rates and hiked its sales and profit forecasts sharply for the year.

The world’s biggest maker of health care products today reported net income of $6.28 billion, or $2.35 per share, in the quarter, up from $3.63 billion, or $1.36 per share, a year earlier.

Adjusted income came to $6.63 billion, or $2.48 per share. That easily topped Wall Street projections for $2.28 per share, according to a survey by Zacks Investment Research.

Revenue totaled a whopping $23.31 billion, up 27.1% from $18.34 billion in 2020’s second quarter.

The one weak spot was dismal sales of J&J’s COVID-19 vaccine, which brought in just $164 million in the quarter and a total of $264 million so far this year.

The vaccine has been plagued by concerns about some very rare side effects and the shutdown of the Maryland factory of J&J’s U.S. contract manufacturer, Emergent BioSolutions, due to contamination problems that have led to tens of millions of vaccine doses having to be trashed. It’s unclear when — or if — the U.S. Food and Drug Administration will allow the factory to resume production.

J&J has the only authorized vaccine that only requires one shot, so it had been expected to play a huge role in vaccinating people in rural areas and developing countries. Instead, the company has fallen far short of its supply commitments to the U.S., other governments and a World Health Organization-backed program to get affordable vaccines to poor and middle-income countries.

J&J, based in New Brunswick, N.J., said foreign sales jumped 29.5% to $11.39 billion, while U.S. sales rose 24.9% to $11.92 billion.

J&J’s medical device and diagnostics division had been a laggard amid a lengthy restructuring and the pandemic leading people to delay scheduled surgeries and other care. It turned in the best performance in the quarter, with revenue jumping 62.7% to $6.98 billion.

The maker of cancer drugs Darzalex and Imbruvica reported that prescription drug sales, long the company’s main growth driver, rose 17.2% to $12.6 billion.

Sales of consumer health products like Tylenol and Band-Aids, which have been buoyed during the pandemic by medicine cabinet stocking and an increased focus on wellness, climbed 13.3% to $3.74 billion.

J&J noted that sales had a 4.1% benefit from favorable currency exchange rates.

During the quarter, the FDA approved J&J’s Rybrevant, the first targeted treatment for non-small cell lung cancer that has certain genetic mutations.

Johnson & Johnson said it expects adjusted full-year earnings in the range of $9.60 to $9.70 per share, up from its April forecast of $9.42 to $9.57. It expects revenue in the range of $93.8 billion to $94.6 billion, up from $90.6 billion to $91.6 billion.

Company shares edged up 1% to $170.11 before the opening bell today.