Johnson & Johnson stock retook its 200-day line Wednesday after the health care bellwether beat second-quarter expectations, though it lowered full-year profit guidance.
For the year, the company now expects to earn an adjusted $9.97 to $10.07 per share, below its prior target of $10.57 to $10.62. The guidance cut reflects costs associated with recent acquisitions. Over the past two months, J&J has wrapped its takeovers of Shockwave Medical, Proteologix and Yellow Jersey Therapeutics. Combined, the deals are worth roughly $15.2 billion.
Analysts expects Johnson & Johnson to earn $10.45 per share this year, according to FactSet. Leerink Partners analyst David Risinger noted the updated guidance includes 5 cents of upside from improved performance, but a 68-cent hit from takeovers. He has an outperform rating on J&J stock.
On the stock market Wednesday, Johnson & Johnson stock rose 3.7%, closing at 156.58. Shares surged above their 200-day moving average for the first time since late March, MarketSurge shows.
Johnson & Johnson Stock: Drug Sales Beat
Overall, Johnson & Johnson earned $2.82 per share, minus certain items, on $22.45 billion in second-quarter sales. Earnings jumped 10.2%, while sales climbed 4.3%. Both measures outperformed expectations for $2.71 and $22.33 billion, respectively.
But there were caveats in the results. Pharmaceutical sales beat forecasts by 2%, but the medtech unit missed Johnson & Johnson stock analysts' call by 3%, Leerink's Risinger said. He also noted adjusted earnings topped projections due to lighter-than-expected research and development expenses.
The innovative medicines division generated $14.49 billion in sales, up 5.5% on a strict, as-reported basis. Medtech sales eked out a 2.2% gain to $7.96 billion. Analysts called for $14.13 billion in drug sales and $8.17 billion in medtech revenue.
Though Johnson & Johnson cut its full-year earnings outlook, the company retained its sales estimate for $88 billion to $88.4 billion.
Johnson & Johnson stock recently rose above its 50-day moving average. But shares have been in a two-year downtrend.
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