(Bloomberg) -- Johnson & Johnson forecast 2022 earnings and sales above Wall Street’s expectations as it prepares to separate its drug and medical device unit from its consumer business. Fourth-quarter revenue narrowly missed analysts’ estimates.
The health-care giant expects annual earnings of $10.40 to $10.60 a share, according to a statement Tuesday, ahead of analysts’ average projection of $10.32 a share. Sales, including those of its Covid-19 vaccine, will be $98.9 billion to $100.4 billion, the company said.
Chief Financial Officer Joseph Wolk said he hopes to see reduced Covid disruptions to the health-care system in 2022. “Each quarter is getting a little bit progressively better,” he said in an interview.
Investors are preparing for a transformative year at New Brunswick, New Jersey-based J&J as new leadership has taken the helm and the conglomerate prepares to split, a move already underway at other health-care companies including GlaxoSmithKline Plc and Pfizer Inc. For the first time, Joaquin Duato will join the quarterly conference call in the role of chief executive officer.
Fourth-quarter earnings were $2.13 a share, just beating the Street view of $2.12 a share, while revenue of $24.8 billion missed the average estimate of $25.3 billion. The miss “likely reflected the incremental headwind from omicron, especially in the U.S.,” Wells Fargo analyst Larry Biegelsen said in a note to investors.
The shares were little changed as of 9:33 a.m. in New York. They lost 4.7% so far this year through Monday’s close amid a broader market sell-off.
Quarterly sales were driven by blockbuster products like Darzalex for multiple myeloma and psoriasis treatment Tremfya, and the company’s Covid shot generated $1.6 billion. Analysts are still intrigued by the prospects for the vaccine that has so far disappointed in the U.S., due in part to production setbacks.
J&J expects 2022 sales of $3 billion to $3.5 billion for the company’s coronavirus shot, a figure that reflects contracts reached through January to supply under 1 billion doses this year, primarily to low- and middle-income countries, Wolk said.
In 2021, J&J’s drug unit accounted for more than half of company’s annual sales, bringing in $52 billion, while a recovery in elective surgeries drove 18% growth in the medical-device business that brought in $27 billion. The performance of these two entities continues to underscore the rationale for the consumer spinoff.
“While the market itself has been choppy, and elective procedures have been delayed, we think we’re extremely well positioned when things return to more of a normal cadence,” Wolk said.
(Add CFO comments from third paragraph)
©2022 Bloomberg L.P.