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Johnson & Johnson's Fourth-Quarter Results Leave Wall Street With Mixed Emotions

By Cory Renauer - Jan 22, 2020 at 1:03PM

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The world's largest healthcare company gave investors reasons for both enthusiasm and concern.

Johnson & Johnson (JNJ 1.75%) kicked off another earnings season with fourth-quarter results that missed analysts' consensus estimates on the top line, but contained enough positive surprises to keep the stock from plunging.

The world's largest healthcare company reported revenue of $20.75 billion, which was $80 million less than the average Wall Street estimate. The bottom line was a different story: Adjusted earnings of $1.88 per share surpassed expectations by one penny.

Shopping cart filled with pills.

Image source: Getty Images.

On the way down

Questions about how much asbestos makes it into talcum powder continued to pressure Johnson & Johnson's consumer goods segment. Sales of its baby care products fell 11% from the prior-year period to $421 million.

The company's pharmaceutical segment is still responsible for a slight majority of total revenue despite declining sales of Remicade. Biosimilar competition for the aging anti-inflammatory injection pushed fourth-quarter sales down by 16.4% year over year to $1.0 billion.

Similarly, J&J's blockbuster prostate cancer treatment, Zytiga has been facing generic competition since late 2018 that pushed its fourth-quarter sales 13.8% lower to $677 million.

Going up

J&J was able to report total fourth-quarter revenue that rose 1.7% because a handful of newer products have compensated for the declines of Zytiga and Remicade.

Sales of Stelara -- a treatment for psoriasis, Crohn's disease, and ulcerative colitis -- surged 17.7% year over year to $1.7 billion. Sales of the company's more recently launched psoriasis injection, Tremfya, rocketed 53.9% higher to $270 million.

Younger drug launches in J&J's oncology segment also stepped up their performance in the fourth quarter. Combined sales of blood cancer treatments Darzalex and Imbruvica rose 32.5% to $1.7 billion.

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