AP

Strong Q2 at J&J, but outlook cut again due to dollar’s rise

Jul 18, 2022, 4:28 PM | Updated: Jul 19, 2022, 3:59 pm

FILE - The Johnson & Johnson logo appears above a trading post on the floor of the New York Stock E...

FILE - The Johnson & Johnson logo appears above a trading post on the floor of the New York Stock Exchange, Monday, July 12, 2021. Johnson & Johnson rode growing sales of the cancer treatment Darzalex and other key drugs to a better-than-expected second quarter, but foreign exchange rates again cut into the health care giant’s 2022 forecast. The company on Tuesday, July 19, 2022, dropped its forecast to a range below analyst expectations after also trimming it in April due to exchange rates. (AP Photo/Richard Drew, file)

(AP Photo/Richard Drew, file)

Johnson & Johnson rode sales of the cancer treatment Darzalex and other key drugs to a better-than-expected second quarter, but exchange rates again pinched the health care giant’s 2022 forecast.

After trimming its forecast in April citing exchange rates, the company did so again Tuesday to a range below analyst expectations. Johnson & Johnson, which brings in nearly half of its sales from outside the United States, said foreign exchange rates delivered a $1.5 billion hit to sales in quarter.

The strong U.S. dollar is nearing parity with the euro for the first time in decades, and that can affect sales for companies that do a lot of international business. They have to convert those sales into dollars when they report earnings.

A stronger dollar decreases the value of those sales. It also gives foreign products a price edge in the United States.

J&J said Tuesday that it now expects adjusted earnings of $10 to $10.10 per share this year, down from the $10.15 to $10.35 it forecast in the spring.

Wall Street had been expecting earnings of $10.19 per share, according to FactSet.

In the second quarter for J&J, sales of the blood cancer treatment Darzalex jumped 39% to nearly $2 billion. Sales of J&J’s one-shot COVID-19 vaccine, which debuted last year, totaled $544 million, with only $45 million coming from the United States.

U.S. regulators in May strictly limited who can receive Johnson & Johnson’s COVID-19 vaccine due to the ongoing risk of rare but serious blood clots. That came a month after J&J said it was suspending sales projections for the vaccine, from which it doesn’t intend to profit.

Outside pharmaceuticals, which make up J&J’s biggest business, sales slipped for the company’s medical device and consumer health segments but grew slightly when not counting exchange rates.

J&J said last fall it will split off its consumer health business, which sells Band Aids and beauty products, into a separate, publicly traded company. That will allow the world’s largest maker of health care products to focus on pharmaceuticals and medical devices.

Chief Executive Officer Joaquin Duato told analysts on Tuesday that the company was on track to complete the separation next year.

Overall, J&J’s quarterly profit plunged 23% to $4.81 billion in the second quarter compared with last year’s quarter, when earnings jumped as hospitals and the rest of the health care industry recovered from the initial impact of the pandemic.

Adjusted earnings per share totaled $2.59 and sales grew 3% to $24.02 billion.

Industry analysts expected earnings of $2.54 per share on $23.77 billion in revenue.

Shares of the New Brunswick, New Jersey, closed Tuesday down $2.54, or 1.5%, to $171.69.

The stock price has risen 0.4% so far this year while the Dow Jones industrial average, of which J&J is a member, has dropped 12.4%.

___

Follow Tom Murphy on Twitter: https://twitter.com/thpmurphy

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Photo: A delegate wears a hat with pins during the Republican National Convention Monday, July 15, ...

Christine Fernando, Steve People and Jill Colvin, The Associated Press

Rep. Walsh speaks for Washington as cheering GOP delegates nominate Trump for president

Cheering GOP delegates formally nominated Donald Trump for president at Monday's Republican National Convention kickoff.

58 minutes ago

Photo: Sen. J.D. Vance, R-Ohio, right, points toward Republican presidential candidate former Presi...

Jill Colvin, Julie Carr Smyth, Steve Peoples and Zeke Miller, The Associated Press

Trump picks Sen. JD Vance of Ohio, a once-fierce critic turned loyal ally, as his GOP running mate

Donald Trump named Sen. JD Vance of Ohio as his running mate, choosing a onetime critic who became a loyal ally.

5 hours ago

trump assassination...

Ayanna Alexander, The Associated Press

What to know about Trump assassination attempt and the investigation into the shooting

Authorities want to know how a shooter was able to get on top of a roof so close to where former President Donald Trump was speaking and open fire.

10 hours ago

Photo: Republican presidential candidate former President Donald Trump is surrounded by U.S. Secret...

Julie Carr Smyth, Jill Colvin, Colleen Long, Michael Balsamo, Eric Tucker and Michelle L. Price, The Associated Press

Trump heads to convention as authorities investigate motive, security in assassination attempt

Trump called for unity and resilience after an attempt on his life added fresh uncertainty to an already tumultuous presidential campaign.

24 hours ago

Photo: President Joe Biden speaks from the Roosevelt Room of the White House in Washington, Sunday,...

Will Weissert and Zeke Miller, The Associated Press

In primetime address, Biden says country must not go down road of political violence

President Joe Biden says “we can’t, we must not go down” the road of political violence in America after the attempted Trump assassination.

1 day ago

Photo: President Joe Biden speaks at a news conference following the NATO Summit in Washington, Thu...

Zeke Miller, Seung Min Kim, Lisa Mascaro and Colleen Long, The Associated Press

Biden says during news conference he’s going to ‘complete the job’ despite calls to bow out

Biden used his highly anticipated news conference to deliver a defense of his policies and batted away questions about his ability to serve.

4 days ago

Strong Q2 at J&J, but outlook cut again due to dollar’s rise