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Stock Market News: Johnson & Johnson Reports; AT&T Parts Ways With Hulu

By Steve Symington – Updated Apr 16, 2019 at 10:46AM

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See why the consumer-goods juggernaut and telecom behemoth are on the move today.

U.S. stocks climbed on Tuesday morning following a bevy of better-than-expected earnings reports. As of 10:40 a.m. EDT, the Dow Jones Industrial Average (^DJI) was up 35 points to 26,420, the S&P 500 (^GSPC 0.56%) gained 6 points to 2,911, and the Nasdaq Composite (^IXIC) jumped 32 points to 7,661.

As for individual stocks, shares of Johnson & Johnson (JNJ 1.01%) rose after the consumer goods giant announced solid quarterly results, and A&T (T 0.81%) is trading mixed after selling its substantial stake in Hulu.

Johnson & Johnson posts strong Q1 results

Shares of Johnson & Johnson were up 2% after the company revealed its first-quarter 2019 revenue climbed 0.1% year over year (or 5.5% on a non-GAAP operational basis, which excludes currency headwinds and divestments) to $20.02 billion. That translated into a 1.9% increase in adjusted earnings to $2.10 per share.

Analysts, on average, were only expecting earnings of $2.04 per share on revenue of $19.61 billion.

Man in suit overlooking a cityscape with windows that resemble a rising stock-market chart.

Image source: Getty Images.

Johnson & Johnson's core pharmaceuticals segment led the way with 7.9% adjusted operational growth (or 4.1% as reported), for revenue of $10.24 billion. Medical devices delivered 4.3% adjusted operational growth (or down 4.6% as reported), to $6.46 billion, and the consumer products business trailed the pack with 0.7% adjusted operational growth (down 2.4% as reported) to $3.32 billion.

Chairman and CEO Alex Gorsky called the quarter "strong," adding, "[W]e remain focused on investing in innovative technologies and platforms that will make a meaningful difference in the lives of patients around the world."

Despite intensified foreign-currency headwinds, Johnson & Johnson also maintained the midpoints of its previous 2019 outlook. More specifically, the company reiterated its guidance for 2019 reported sales of $80.4 billion to $81.2 billion, and narrowed its target for adjusted earnings per share to a range of $8.53 to $8.63 (compared to $8.50 to $8.65 before).

AT&T bows out of Hulu

Meanwhile, AT&T has waffled between positive and negative territory throughout the morning after the telecom juggernaut sold its minority 9.5% stake in Hulu back to the streaming-video joint venture for $1.43 billion -- a deal that values Hulu at roughly $15 billion.

The move effectively bolsters the ownership of Hulu's remaining investors, who will together determine how to allocate the stake. Just prior to AT&T's divestment, Comcast's NBCUniversal owned a 30% stake in Hulu, while Disney boasted a controlling 60% stake following the completion of its acquisition of most the assets of Fox last month.

The move didn't require government or third-party approvals, so has already been signed and closed. AT&T, for its part, will use the proceeds of the transaction to reduce debt.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends DIS. The Motley Fool recommends CMSCA. The Motley Fool has a disclosure policy.

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