Johnson & Johnson beat first-quarter expectations, as growth in the health care giant’s home market helped counter another revenue hit overseas because of the strong dollar.
The health care giant booked a $68 million loss on a one-time charge in the quarter related to its baby powder, and revenue grew more than 5% to $24.75 billion, which was better than anticipated.
Adjusted earnings totaled $2.68 per share, topping Wall Street projections for per-share earnings of $2.50, according to a survey by FactSet.
Johnson & Johnson sells prescription drugs and medical devices. It is splitting off its consumer health business, which includes well-known products like BandAids. The company expects to complete the separation this year.
Sales in pharmaceuticals, the company’s largest business, grew 4% in the first quarter, helped by two long-standing top sellers, the cancer treatment Darzalex and Stelara, which treats psoriasis and other inflammatory disorders.
Sales in the U.S. grew nearly 10% to $12.52 billion in the quarter, while international sales climbed nearly 2%.
A strong U.S. dollar can affect sales for companies that do a lot of international business. They have to convert those sales into dollars when they report earnings. The stronger dollar decreases the value of those sales. It also gives foreign products a price edge in the United States.
J&J brings in nearly half of its revenue from outside the United States.
The company also booked in the first quarter a one-time charge tied to a proposed settlement for lawsuits alleging that its baby powder containing talc causes cancer.
The company said earlier this month that it would set aside nearly $9 billion, more than quadrupling the amount that the company had previously reserved to pay for its potential liability.
J&J pulled the baby powder from U.S. and Canadian store shelves a few years ago and is removing it from worldwide markets this year. The company isn’t admitting any wrongdoing as part of the proposed settlement.
J&J also said Tuesday that its board OK’d a 5% increase in the company’s quarterly dividend. That bumps the amount up to $1.19 per share from $1.13 per share.
The New Brunswick, New Jersey, company also boosted the lower end of its forecasted range for 2023 by a dime. It now expects adjusted earnings of between $10.50 and $10.60 per share.
Analysts expect earnings of $10.51 per share this year.
J&J debuted its 2023 forecast in January at a range above most analyst expectations.
Shares edged higher in early morning trading. ___ Follow Tom Murphy on Twitter: https://twitter.com/thpmurphy