Johnson & Johnson exceeds Q2 profit and revenue estimates

Johnson & Johnson(J&J) topped estimates for second-quarter earnings and revenue on Wednesday, driven by strong sales of its medicines, including cancer treatment Darzalex and blockbuster psoriasis drug Stelara.

Johnson & Johnson (JNJ.N) reported stronger-than-expected results for the second quarter, driven by robust sales of key pharmaceutical products, including the cancer treatment Darzalex and the psoriasis drug Stelara.

Key Drivers of Growth

Stelara’s Performance and Future Outlook

Stelara has been a significant contributor to J&J’s revenue, with analysts forecasting sales to exceed $10 billion this year.

However, sales are expected to decline to about $7 billion in 2025 due to the introduction of up to six biosimilar versions in the U.S. market. In Q2, Stelara sales increased by 3.1% to $2.89 billion, surpassing analysts’ estimates of $2.77 billion according to LSEG data.

J&J’s Chief Financial Officer, Joe Wolk, expressed optimism about securing favorable U.S. insurance coverage for Stelara in 2025, despite the impending biosimilar competition.

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“We are still calling for growth in our pharmaceutical business despite the biosimilar competition that we intend to encounter next year,” he said.

Darzalex’s Continued Success

The blood cancer drug Darzalex also contributed significantly to J&J’s revenue, with sales rising by 18.4% to $2.88 billion, slightly above the LSEG estimate of $2.86 billion.

Financial Highlights

Revenue and Earnings

J&J reported total revenue of $22.4 billion, exceeding the consensus estimate of $22.3 billion. Adjusted earnings per share were $2.82, beating analysts’ expectations of $2.70 per share.

Shares of J&J increased nearly 3% to $155.4 in morning trading following the earnings announcement.

Guidance for 2024

The company revised its total 2024 sales forecast to a range of $89.2 billion to $89.6 billion, up from the previous estimate of $88.7 billion to $89.1 billion.

However, J&J lowered its annual per-share earnings forecast to a range of $10 to $10.10 from the prior range of $10.60 to $10.75.

This adjustment includes a 68-cent impact from costs related to acquisitions, including the $13 billion purchase of cardiac medical device company Shockwave.

Challenges Ahead

Impact of Biosimilars

Wolk noted that sales growth for the pharmaceuticals division is expected to slow in the second half of the year as Stelara biosimilars enter the European market later this month.

Despite these challenges, J&J remains confident in its ability to maintain growth in its pharmaceutical segment through strategic planning and favorable insurance negotiations.

Conclusion

Johnson & Johnson’s second-quarter performance highlights the strength of its pharmaceutical portfolio, particularly with drugs like Stelara and Darzalex driving revenue.

While the company faces challenges from upcoming biosimilar competition, it continues to focus on strategic initiatives to sustain growth and adapt to market changes.