The Dow Jones Industrial Average (^DJI 0.32%) was up 2.3% by 12:35 p.m. EDT Tuesday as earnings season began in earnest. As more companies report results in the coming days and weeks, it will become clearer how badly the coronavirus pandemic and the associated social distancing are hitting corporate profits.

Johnson & Johnson (JNJ -0.29%) was forced to cut its full-year guidance due to the pandemic, but the company beat expectations for the first quarter and raised its dividend. Meanwhile, JPMorgan Chase (JPM 0.24%) had little good news to share, missing analyst estimates badly as credit loss reserves were built up ahead of what will be a rough period for many banks.

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Johnson & Johnson lowers outlook, boosts dividend

Johnson & Johnson managed to beat analyst expectations for the first quarter, but the impact of the pandemic forced the healthcare giant to reduce its guidance for the full year. Despite the guidance cut, the company still raised its quarterly dividend for the 58th consecutive year.

First-quarter revenue was $20.7 billion, up 3.3% year over year and $1.2 billion higher than analysts were expecting. Consumer health sales rose 9.2% to $3.63 billion, driven by strong demand for over-the-counter products related to the pandemic. Pharmaceutical sales jumped 8.7% to $11.1 billion.

While sales of certain medications benefited from the pandemic, sales of medical devices suffered. Johnson & Johnson reported an 8.2% sales decline for the category, driven by the deferral of medical procedures in its surgery, orthopedics, interventional solutions, and vision businesses. Adjusted earnings per share jumped 9.5% to $2.30, helped by the strength in some of the company's segments. EPS was $0.30 higher than analysts were expecting.

For the full year, Johnson & Johnson now expects reported sales to decline by 2% to 5.5%, and for adjusted EPS to drop by 9% to 13.6%. Previously, the company had guided for a sales increase of 4% to 5%, and an adjusted EPS increase of 3.1% to 4.8%.

While a guidance cut is never good news, the company lived up to its reputation as a safe dividend stock, boosting its quarterly payout by 6.3% to $1.01 per share. The next dividend is payable on June 9 to shareholders of record on May 26.

Shares of Johnson & Johnson were up 4.6% by early afternoon. Following the post-earnings surge, the stock has now clawed back most of its pandemic-related losses, and is down just 5% from its 52-week high.

JPMorgan Chase builds reserves

Unlike Johnson & Johnson, megabank JPMorgan's first-quarter results fell well short of analyst expectations. Revenue was $28.25 billion, down 3% year over year and $1.2 billion below analyst estimates. EPS of $0.78 missed the mark by a whopping $1.34, tumbling by 70% from the prior-year period.

The steep drop in earnings was mostly due to the building of reserves, reflecting an expected increase in future credit losses due to the pandemic. JPMorgan boosted its reserves by $6.8 billion during the quarter, reducing earnings per share by $1.66.

"The company entered this crisis in a position of strength, and we remain well capitalized and highly liquid ... [with] total liquidity resources of over $1 trillion," said CEO Jamie Dimon in prepared remarks. How bad things get for JPMorgan in the coming months -- as consumers and businesses reel from the pandemic and its economic impact -- is impossible to predict.

Shares of JPMorgan were down 2.3% by early afternoon. The stock is now down about 32% from its 52-week high.