Investors Applaud Johnson & Johnson 2Q Results, Boosts Full Year Outlook

Johnson & Johnson

delivered solid results for the second quarter. The company reported 11.5 percent drop in net earnings despite sales witnessing 3.9 percent top line growth hurt by different expenses like restructuring. However, excluding adjustments, its profit would have increased 1.1 percent on YOY basis in the second quarter and came in well above the Street analysts' expectations. The company also lifted its full year outlook above the consensus. Following this, the stock advanced more than three percent in the pre-market trading on Tuesday. Johnson & Johnson reported net earnings of $4.0 billion, down from $4.52 billion while earnings per share dipped 11.2 percent to $1.43 from $1.61 in the year-ago quarter. On an adjusted basis, it would have earned $4.9 billion or $1.74 a share in the latest quarter. This was $0.06 a share higher than the Street analysts' expectations of $1.68 a share. Similarly, its top line grew 3.9 percent to $18.5 billion from $17.8 billion in the previous year quarter. Analysts expected the company to generate revenue of $17.97 billion. Analysts' highest revenue expectation was $18.2 billion. The FMCG firm said that its operational sales grew 5.3% and that the currency had an unfavorable impact of 1.4 percent. Its domestic sales increased 7.4 percent while International sales advanced 0.4 percent reflecting operational growth of 3.1 percent, as well as, a negative currency impact of 2.7 percent. Excluding adjustments, on an operational basis, worldwide sales would have increased 7.9 percent, domestic sales advanced 8.8% and international sales grew 6.9%. Johnson & Johnson said that its operations in Venezuela were negatively impacted its worldwide operational sales growth by 30 basis points, and international sales uptick by 70 basis points. The company's chairman and CEO, Alex Gorsky, commented, "We continue to see good momentum through the first half of 2016, delivering solid results in the second quarter, supported by strong underlying growth across our enterprise. We saw notable strength in our Pharmaceuticals business due to the continued success of new products, and also achieved significant clinical milestones, advancing our robust pipeline." He added, "In our Consumer business, we are executing strategic portfolio decisions to expand our market leadership in key segments, and in Medical Devices, we are continuing to accelerate our growth driven by new product launches and transforming our commercial models." Mr. Gorsky continued, "I am proud of our dedicated and talented employees whose commitment to advancing health and well-being for patients and consumers around the world is fueling our growth." Going forward, the Company boosted its sales forecast to $71.5 billion to $72.2 billion for the full year. The Company also lifted its adjusted earnings outlook to $6.63 - $6.73 per share. Both are above the Street estimations of $71.72 billion revenue and $6.61 EPS. Following this, the stock advanced 3.13 percent in the pre-market trading on Tuesday.