What happened
Johnson & Johnson (JNJ 1.33%) is having a strong start to Thursday's trading session. The drugmaker and medical technology giant's shares were up 5.74% on heavy volume at 10:36 a.m. ET Thursday morning.
What's powering this rally? Ahead of the opening bell, J&J released 2023 second-quarter earnings that exceeded Wall Street's expectations on both top and bottom lines.
So what
The second quarter of 2023 was a successful one for J&J, as the company reported strong growth in its pharmaceutical and medtech segments. Here are some of the key takeaways from the report:
- Pharmaceutical sales increased by 3.9% year over year (YOY) on an adjusted operational basis, reaching $13.7 billion in the second quarter. This healthy mid-single-digit rise in pharma revenue was driven by high demand for oncology, immunology, and neuroscience products.
- Medtech revenue rose 9.9% YOY on an adjusted operational basis, reaching $7.7 billion in the second quarter. This nearly double-digit uptick in medtech sales was driven by a broad portfolio of products across various categories, such as electrophysiology, orthopedics, wound care, and contact lenses.
- J&J also announced plans to "split off" shares of its consumer healthcare carve-out, Kenvue, through an exchange offer in its next step in the separation.
Now what
Is J&J stock a buy on this earnings beat? I think so. This blue chip pharma company has raised its dividend for 61 straight years, its shares have beaten the market regularly over the past 20 years, and it is one of the most productive innovators in pharmaceuticals and medtech. That's an attractive combination that ought to appeal to both growth and value investors.
