(Reuters) -Johnson & Johnson on Tuesday forecast annual profit above Wall Street estimates, as steady demand for its drugs such as cancer treatment Darzalex is expected to help ease pressure from inflation and a strong dollar.
Shares of the drugmaker, however, fell 1% to $166.12 in premarket trading as fourth-quarter sales missed analysts’ estimates due to lower demand for its medical devices.
J&J also expects sales of its medical devices to be lower in the first half of 2023 than in the second half, as surging COVID-19 cases in China limit medical procedures in hospitals.
Overall, the healthcare conglomerate posted better-than-expected quarterly earnings, helped by demand for Darzalex and its COVID-19 vaccine.
J&J expects to earn between $10.45 and $10.65 per share on an adjusted basis for 2023, above analysts’ estimates of $10.35 per share profit at the midpoint.
The higher 2023 profit forecast also reflects better-than-expected cost controls by J&J, Edward Jones analyst John Boylan said.
J&J’s large pharmaceuticals business is its major profit engine and the company is betting on that and its devices unit as the healthcare conglomerate prepares to spin off its consumer health business by the end of this year.
Pharmaceutical sales of $13.16 billion for the fourth quarter beat estimates of $13.14 billion. Darzalex sales were $2.08 billion, while analysts were expecting $2.02 billion, according to Refinitiv.
J&J also recorded $821 million in COVID-19 vaccine-related costs, which were related to changes in its research program and manufacturing capacity.
Excluding items, J&J earned $2.35 per share, above analysts’ average estimates of $2.23 per share, according to IBES data from Refinitiv.
(Reporting by Manas Mishra and Bhanvi Satija in Bengaluru; Editing by Anil D’Silva)
