Adjusted earnings came to $1.88 per share, matching the expectations of industry analysts, according to a survey by FactSet. Total revenue edged up 1.7% to $20.75 billion. J&J also benefited from a low tax rate, just 4.9% in the quarter.
The New Brunswick, New Jersey, based maker of baby shampoo and biologic drugs forecast 2020 revenue of $85.4 billion to $86.2 billion, and adjusted earnings per share of $8.95 to $9.10. Shares of J&J dropped $2.37, or 1.6%, to $146.90 per share.
“The company is treading water, with revenue and earnings about as expected, and its stock price up just a bit this year, but not up as much as the S&P 500. Its drug business is doing well, led by four big products whose sales are increasing," Erik Gordon, a professor and pharmaceuticals analyst at University of Michigan's Ross School of Business, commented in an email. “A big question hanging over the company is how many billions of dollars it may have to pay as a result of the wave of products liability lawsuits it faces.”
J&J is dealing with thousands of lawsuits over drug side effects, its role in the U.S. opioid epidemic and allegations its baby powder caused cancer in some users and its surgical mesh for sagging pelvic organs injured patients.
Sales at J&J’s prescription drug division jumped 3.5% to $10.55 billion, driving the strong results for the company as it has in recent years. Sales were led by immune disorder drug Stelara, cancer drugs Darzalex and Imbruvica, and schizophrenia drug Invega Sustenna, four of the eight J&J drugs that produce annual sales topping $2 billion each.
“Our robust growth can be attributed to volume, not price,” CEO Alex Gorsky told analysts on a conference call to discuss the results. J&J and other drugmakers have been under intense scrutiny for several years for repeated drug price hikes and ever-higher launch prices for new drugs.
At J&J’s medical devices and diagnostics business, which the company has been restructuring, sales declined 0.5% to $6.63 billion. Sales at its consumer health division, which sells baby products and over-the-counter medicines, rose 0.9% to $3.57 billion.
During the fourth quarter, the European Commission approved Spravato, a nasal spray for treating depression, and cancer blockbuster Darzalex, for treating the bone cancer multiple myeloma in combination with other medicines.
J&J acquired rights to bermekimab during the quarter, an experimental drug for treating eczema and other skin disorders, and completed its acquisition of Taris Biomedical, which is developing treatments for bladder disorders, including cancer. J&J also agreed to buy the remaining stake in Verb Surgical, a move to boost its strength in robotics and data science.
For all of 2019, J&J reported sales of$82.06 billion and net income of $15.12 billion, or $5.63 per share.
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