Even as many businesses have seen their sales and profits decimated by the coronavirus pandemic, Johnson & Johnson (NYSE:JNJ) has continued to generate solid results.
The healthcare titan's sales rose 3.3% to $20.7 billion in the first quarter. Those gains were driven by a 9.2% jump in consumer health revenue and an 8.7% rise in pharmaceutical sales. Consumer health sales benefited from higher demand for over-the-counter products such as Tylenol, Motrin, and Listerine.
But those improved results were partially offset by an 8.2% decline in medical device revenue, as sales in that segment were dampened by the widespread deferral of non-urgent surgical procedures due to the COVID-19 crisis.
Johnson & Johnson's adjusted net earnings climbed 8.7% to $6.2 billion. And adjusted EPS, which was boosted by share buybacks, increased 9.5% to $2.30.
Management remains committed to passing a sizable portion of Johnson & Johnson's profits on to shareholders via a steadily growing dividend. The company's board of directors approved a 6.3% increase of its quarterly cash payout to $1.01 per share. That marked J&J's 58th straight year of annual dividend increases, and it places the stock's current yield at a solid 2.8%.
J&J did, however, lower its full-year guidance due to the expected impact of COVID-19. The company now expects 2020 sales and adjusted EPS to fall roughly 4% and 11%, respectively, down from prior estimates for growth of 4.5% and 4%.
Still, J&J is optimistic that it could help be part of the solution to the coronavirus pandemic. The company is investing more than $1 billion in the development of a COVID-19 vaccine candidate. J&J intends to begin human clinical trials by September, with the hope of obtaining emergency-use authorization from the U.S. Food and Drug Administration by early 2021.
"With Johnson & Johnson's century-plus history of leading in times of great challenge, we are mobilizing our resources across the company in the fight against the COVID-19 pandemic," Chairman and CEO Alex Gorsky said in a press release.
The company is already ramping up its manufacturing capabilities with the goal of being able to rapidly supply more than 1 billion doses of its candidate vaccine, should it prove effective and safe.
"Johnson & Johnson is built for times like this, and we are leveraging our scientific expertise, operational scale and financial strength in the effort to advance the work on our lead COVID-19 vaccine candidate," Gorsky said. "We are committed to beginning production at risk imminently and bringing an affordable and accessible vaccine to the public on a not-for-profit basis for emergency pandemic use."