Market News

Johnson & Johnson Second Quarter Results Impress

Story Highlights

Johnson & Johnson’s upbeat results for the second quarter are a tailwind for the company. Furthermore, liquidity strength gives it a strong footing.

Pharmaceutical major Johnson & Johnson (NYSE: JNJ) reported stronger-than-expected results for the second quarter. The solid results were on the back of both revenue and earnings surpassing estimates.

Revenue, Earnings Up

Johnson & Johnson reported quarterly revenues of $24 billion which denotes a growth of 3% from the previous year. Moreover, the figure surpassed the consensus estimate of $23.77 billion. Year-over-year growth of 6.7% and 3% in pharmaceutical revenues and worldwide revenues, respectively, drove the overall growth in revenues for the company.

The company’s earnings per share (EPS) for the quarter came in at $2.59, a 4.4% increase from the prior year. Further, the figure topped the consensus estimate of $2.54.

Some Key Operating Metrics

In the second quarter, Johnson & Johnson paid dividends to the tune of about $3 billion.

Meanwhile, the company spent $3.7 billion on Research & Development (R&D) during the quarter.

Notably, it ended the quarter with a free cash flow balance of $8 billion.

Management’s Commentary

CEO of Johnson & Johnson, Joaquin Duato said, “Our solid second quarter results across Johnson & Johnson reflect the strength and resilience of our Company’s market leadership in the midst of macroeconomic challenges. “I am continually energized by the focus and passion of my Johnson & Johnson colleagues and their dedication toward delivering transformative healthcare solutions to patients and consumers around the world.”

Wall Street’s Take

Overall, the Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on seven Buys and three Holds. The JNJ average price target of $192.50 implies the stock has upside potential of 10.5% from current levels. Shares have gained 4.4% over the past year.

Positive Investor Sentiment

TipRanks’ Stock Investors tool shows that top investors currently have a Positive stance on JNJ. Further, 7.7% of the top portfolios tracked by TipRanks, increased their exposure to JNJ stock over the past 30 days.

Key Takeaways

Johnson & Johnson’s results for the second quarter were marked by improvement from the past year. This is considering the tough economic environment prevailing globally. Further, the company’s solid operational and liquidity strength can be expected to tide it through uncertain times.

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