Johnson & Johnson (JNJ -0.29%) kicked off earnings season for the healthcare sector on Tuesday, and based on what its management had to say, it looks like investors should brace themselves for more disappointment ahead. The positive earnings guidance it issued just three months ago has been totally upended by the COVID-19 pandemic.  

Unprecedented change 

In 2019, Johnson & Johnson earned an adjusted $8.68 per share and in January, the company told investors to expect between 3.1% and 4.8% more in 2020. While first-quarter results were better than expected for J&J's pharmaceutical and consumer goods segments, the company's outlook for 2020 is markedly worse than it was.

Doctor in personal protective equipment.

Image source: Getty Images.

Rather than a modest gain for the year, Johnson & Johnson now expects to earn 11.2% less in 2020 at the midpoint of its new guidance range. After factoring in the expected impact of the coronavirus pandemic on the company's business, management cut its forecast for adjusted earnings to between $7.50 and $7.90 per share.

Hang on

Although Johnson & Johnson's outlook turned negative, it did beat expectations on the top and bottom lines in the first three months of 2020. Adjusted earnings of $2.30 per share were 15% higher than analysts' consensus estimate. And the $20.7 billion in revenue beat analysts' expectations by 6%.  

The company signaled confidence in its long-term future with its 58th consecutive annual dividend bump. In June, shareholders will receive a quarterly payout of $1.01 per share, 6.3% higher than its previous dividend.