Will Johnson & Johnson (JNJ) Miss This Earnings Season? - Analyst Blog

Johnson & Johnson JNJ is scheduled to report first quarter 2014 results before the opening bell on Apr 15. Last quarter, Johnson & Johnson had posted an earnings surprise of +3.33%. Let's see how things are shaping up for this announcement.

Factors at Play

Johnson & Johnson has delivered positive earnings surprises in the last four quarters with an average beat of 3.75%.

Although revenues will continue to be impacted by genericization, the strong performance of the pharmaceuticals segment especially products like Remicade, Zytiga, Prezista, Invokana, Stelara, Intelence, Xarelto, Simponi, Velcade and Invega Sustenna should partially offset the negative impact of genericization.

Meanwhile, pricing pressure, manufacturing issues and the U.S. healthcare reform measures will affect the bottom line.

Earnings Whispers?

Our proven model does not conclusively show that Johnson & Johnson is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Johnson & Johnson is 0.00% since the Most Accurate Estimate stands at $1.48, in line with the Zacks Consensus Estimate.

Zacks Rank #2 (Buy): Johnson & Johnson's Zacks Rank #2 has little effect on the predictive power of ESP because the Zacks Rank #2 when combined with a 0.00% ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements, that is, a positive Zacks Earnings ESP and a Zacks Rank #1, 2 or 3.

Biogen Idec Inc. BIIB has an Earnings ESP of +8.14% and holds a Zacks Rank #3 (Hold). Biogen will be reporting first quarter results on Apr 23.

AbbVie Inc. ABBV has an Earnings ESP of +1.47% and holds a Zacks Rank #3. AbbVie will report first quarter results on Apr 25.

Cubist Pharmaceuticals Inc. CBST has an Earnings ESP of +5.56% and holds a Zacks Rank #3. Cubist will be reporting first quarter results on Apr 22.