Johnson & Johnson, anticipating significant impact from the COVID-19 pandemic, has slashed its 2020 sales forecast by billions of dollars and also cut its profit expectations.
It’s one of the first major US corporations to report first-quarter earnings and likely a harbinger of things to come as the outbreak disrupts the global economy.
The world’s biggest health products maker on Tuesday said it now expects 2020 revenue of $US77.5 billion to $US80.5 billion, down on a January forecast of $US85.4 billion to $US86.2 billion.
It also forecast adjusted earnings per share of $US7.50 to $US7.90, down from the January forecast of $US9 to $US9.15 per share.
J&J faces both the prospect of lower sales as much of the world stays home to avoid infection, and higher costs as it races to develop a vaccine against the new coronavirus.
“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,” Cheif Executive Alex Gorsky said in a statement.
The maker of Tylenol and baby shampoo reported a very strong first quarter, with net income up 55 per cent. But that was largely before the outbreak sent the global economy on a new tangent.
Net income was $US5.8 billion, or $US2.17 per share. That’s up from $US3.7 billion, or $US1.39 per share, in 2019’s first quarter.
Earning after adjusting for one-time items came to $US6.2 billion, or $US2.30 per share.
The profit easily beat Wall Street per-share expectations of $US2.03 per share.
J&J, based in New Brunswick, New Jersey, posted revenue of $US20.69 billion, which also beat Street forecasts. Wall Street expected $US19.25 billion.
Shares jumped about 4 per cent before the opening bell.