Johnson & Johnson posts Q3 beat; lowers earnings guidance amid M&A impact

Johnson & Johnson (NYSE:JNJ) lowered its full-year earnings outlook on Tuesday despite posting better-than-expected financials for Q3 2024, driven mainly by its pharma unit even as its MedTech division fell short of forecasts.

J&J (JNJ) cut its adjusted operational earnings guidance for 2024 to $9.91 per share from $10.05 at the midpoint, noting that the impact from its recent acquisition of cardiac device maker V-Wave more than offset the improved performance.

However, the New Brunswick, New Jersey-based company raised its full-year operational sales guidance to $89.6B in the midpoint compared to $89.4B previously.

JNJ’s (JNJ) blockbuster drugs, Darzalex Invega Sustenna, and Stelara, contributed to the company’s topline performance, helping the healthcare giant beat Street estimates for revenue by $330M.

Its $22.5B sales for the quarter indicated ~5% YoY growth as Darzalex, a multiple myeloma drug JNJ markets with Genmab (GMAB), brought $3.0B to the top line, exceeding the $2.9B projected by analysts, according to Bloomberg data.

While antipsychotic Invega Sustenna generated $1.0B with ~2% YoY growth, Stelara, which will face low-cost generics in the U.S. next year, added $2.7B, exceeding the consensus despite a ~7% sales drop.

Other notable JNJ products, cancer cell therapy Carvykti and bispecific antibody Tecvayli, marketed with Legend Biotech (LEGN) and Ligand Pharmaceuticals (LGND), respectively., generated $286M and $135M in sales with ~88% YoY and ~21% growth,

However, sales from blood thinner Xarelto marketed with Bayer (OTCPK:BAYZF) fell ~5% YoY to $592M.

JNJ’s MedTech division added ~$7.9B to the topline, missing the consensus of $8.03B despite a ~6% YoY growth driven by a 2.7% positive impact from acquisitions and divestments.

Meanwhile, JNJ’s bottom line for the quarter contracted ~34% YoY to $1.11 in earnings per share due to a one-off charge and expenses related to in-process research and development. However, its adj. earnings per share only fell ~9% YoY to $2.42 amid a 1,900 bps impact from IPR&D charges.