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Johnson & Johnson Tops Q1 Earnings Forecast; Lowers 2020 Outlook on Coronavius Impact

Johnson & Johnson boosted its dividend, and topped first quarter earnings forecasts, but said the coronavirus pandemic will affect its near-term profit forecasts.

Johnson & Johnson  (JNJ)  posted stronger-than-expected first quarter earnings Tuesday but trimmed its full-year profit guidance amid the coronavirus pandemic.

Johnson & Johnson said adjusted earnings for the three months ending in March were pegged at $2.30 per share, up 9.5% from the same period last year and 31 cents ahead of the Street consensus forecast. Group revenues, J&J said, rose 6.7%  last year to $20.7 billion and topped analysts' estimates of a $19.3 billion tally.

Johnson & Johnson also said it would pay a quarterly dividend of $1.01 per share, a 6.3% increase from its previous payout.

Looking into 2020, J&J said it sees full-year earnings of between $7.50 and $9.50, down from a prior forecast of $9.00 to $9.15 per share. Operational sales, the company said, will come in between $79.2 billion and $82.2 billion, compared to its January estimate of $85.8 billion, but latter added that forecasts will be predicated on the virus not returning with the same intensity in the autumn.

“Johnson & Johnson is built for times like this, and we are leveraging our scientific expertise, operational scale and financial strength in the effort to advance the work on our lead COVID-19 vaccine candidate," said CEO Alex Gorsky. "We are committed to beginning production at risk imminently and bringing an affordable and accessible vaccine to the public on a not-for-profit basis for emergency pandemic use.”

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"Our strong performance in the first quarter reflects the efforts of our teams around the world and the sustainability of our business model," he added. "Today, our Board of Directors approved an increase in our quarterly dividend for the 58th consecutive year, underscoring our commitment to delivering value for our shareholders and the confidence we have in our business now and in the future.”

Johnson & Johnson shares were marked 3.13% higher in early trading immediately following the earnings release to change hands at $144.36 each, a move that trims its two-month decline to around 3.84%. That compares to a 16.6% decline for the S&P 500 benchmark. 

Consumer health sales rose 9.2% to $3.63 billion, the company said, while pharmaceutical division revenues jumped 8.7% to $11.13 billion. 

Medical device sales, Johnson & Johnson said, fell 4.8% to $5.932 billion and will likely slump by between 65% to 85% in the current quarter as coronavirus pressures in the healthcare system trigger postponements and cancellations of elective and non-emergency surgeries. 

Late last month, Johnson & Johnson said it had identified a leading coronavirus vaccine candidate that could result in more than a billion doses available to address the global pandemic. The company also said it expects the first batch could be available for emergency use in early 2021.