Healthcare Sector Review: Johnson & Johnson Earnings

Johnson & Johnson (NYSE:JNJ): Johnson & Johnson (NYSE:JNJ) is expected to report Q4 earnings before the market open on Tuesday, January 24 with a conference call scheduled for 8:30 am ET. Analysts are looking for EPS of $1.10 on revenue of $16.28B. The consensus range is $1.04-$1.12 for EPS, and $16.03B-$16.54B for revenue, according to First Call. In Q3, Johnson & Johnson had reported better-than-expected EPS and in-line revenue numbers. At its last earnings conference call, the company expected FY EPS $4.95-$5.00 vs. consensus $4.96 and sees an operational sales increase of 2.5%-4.5% for the year. Looking ahead to FY12, JP Morgan said the company’s consensus estimates look aggressive and it expects the company to guide at least 10c-15c below consensus. On a macroeconomic level, Johnson & Johson said it was encouraged by the business outlook and the positive developments in its pharmaceutical pipeline. The company expects progress in emerging markets and to continue to gain share across key markets. Investors will be looking for updates on recently FDA-approved drugs Xarelto, Empira, and Empire NC RX PTCA. The company also received positive clinical results from Phase 2 Sirkumab study and a phase 3 Atlas trial for Xarelto.

Despite the positive news, Piper Jaffray said it believes Johnson & Johnson’s pharma sales in Q4 was off to a relatively slow start. On the production side, the company said it does not expect any new supplies of Doxil from the troubled Ben Venue Laboratories until late 2012. Investors will look to hear if it has decided to pursue other options to resolve the Doxil shortage. Johnson & Johnson may also provide an update after it recalled Motrin over dissolvability issues last month. In other legal news this past quarter, the company settled two separate cases involving its antippsychotic drug Risperdal. It also lost a patent infringement case against Boston Scientific. In recommendatoins, Johnson & Johnson was initiated with an Overweight at Barclays and was maintained as Neutral at Piper Jaffray.

The shares closed at $65.00, down $0.27, or 0.41%, on the day. Its market capitalization is $177.51 billion.

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