Johnson & Johnson – Despite Vaccine Troubles, Quarterly Earnings Are Above Expectation

Apr 20, 2021

On Tuesday, the pharmaceutical giant Johnson & Johnson reported $100 million earnings in first-quarter sales of its Covid-19 vaccine, despite it being on hold in the U.S. and some European states. The group increased its quarterly dividends and narrowed its profit outlook for the current year.

Successful Quarter Despite Vaccine Troubles

In the first quarter, Johnson & Johnson’s net income rose to $6.20 billion or $2.32 per share; during the same quarter last year, net income was $5.80 billion or $2.17 dollars per share. Earnings per share rose by 12.6% to $2.59 and were thus well above the forecasted of $2.34 per share. Revenue grew by 7.9% to $22.32 billion, beating the forecast of $ 21.98 billion once more.
Pharmaceutical sales rose by 9.6% to $12.20 billion, while medical device sales increased 10.9% to $6.58 billion. The sales forecast was expected to be $12.11 billion in pharmaceuticals and $6.21 billion in medical devices.
For 2021, the company now expects adjusted earnings per share to be in the range of $ 9.42 to $ 9.57 instead of $ 9.40 to $ 9.60. The group’s Chief Financial Officer, Joseph Wolk, commented that the company’s “three business segments are healthier than they were entering the pandemic last year.”
Johnson & Johnson raised its quarterly dividend 5% to $ 1.01 per share. The new dividend will be paid on June 8. Johnson & Johnson’s stock is up 3.4 % year-to-date, while the Dow Jones Industrial Average is up 11.3%.

What’s happening with J&J’s vaccine?

Currently, Johnson & Johnson’s COVID-19 vaccine is on hold in the USA following an incident involving 6 women who developed a condition called cerebral venous sinus thrombosis after two weeks of receiving the vaccine. It is a very rare type of stroke that occurs when blood clots form in the brain’s venous sinuses and eventually leak blood into the brain, causing a hemorrhage.
Dr. Anthony Fauci, the White House’s chief medical advisor, decided to give the FDA some time to investigate the cases and “find some common denominators among the women who were involved.” The U.S. medical regulator must ensure they have fully studied all the information related to the case before they proceed with allowing the vaccine to be used.
“We remain very confident, and we’re hopeful the benefit-risk profile will play out,” said Joseph Wolk regarding the vaccine.

What about Europe?

Vaccinating with Johnson & Johnson’s COVID-19 vaccine did not yet start in Europe, and following U.S.’s decision to halt vaccination, Europe has been examining rare cases of brain thrombosis related to the shot. The European Medicines Agency (EMA) plans to present its opinion on the Johnson & Johnson vaccine on Tuesday.
Johnson & Johnson had just delivered the first vaccines to EU countries a week ago. The manufacturer asked for the vaccine not to be used until the U.S. health authority deems the vaccine safe. EMA believes that the vaccine should be used without restriction since its benefits, preventing complications from COVID-19, outweigh its flaws.