Johnson & Johnson cuts sales and profit forecasts in global economic downturn
US pharmaceutical giant Johnson & Johnson has cut its sales and adjusted profit forecasts, as a post-lockdown slowdown and a global economic downturn collide.
Sales are anticipated to be around $1bn less than bosses thought in April, in the range of $93.3bn and $94.3bn.
In its latest quarter, Johnson & Johnson, which owns skincare brand Neutrogena and has its own Covid-19 jab, saw sales rise three per cent to $24bn in the past few months, up from $23.3bn in the same period last year.
However, the company’s net earnings collapsed nearly a quarter in the three-month period, tumbling from $6.2bn to $4.8bn in the second quarter.
Pharmaceutical firms had reaped massive rewards during the pandemic, from both professional and retail investors alike. However, easing lockdown restrictions has prompted a slowdown in investment in the sector.
Johnson & Johnson, valued at $469bn, had its estimated earnings per share has fall from $2.35 to $1.80 in the quarter.
While the company has made marginal share price gains of 1.85 per cent in the year to date, the company’s share price has fallen nearly five per cent over the past three months.
Bosses have revised down their forecasts for earnings per share for the year, now expecting an adjusted profit of $10.00 to $10.10 per share, from its prior forecast of $10.15 to $10.35.
CEO Joaquin Duato said that despite the revisions, it had been a “solid second quarter”, which reflects the company’s position as one of the world’s largest pharmaceutical companies “in the midst of macroeconomic challenges.”