MW Johnson & Johnson raises sales outlook, even with tariff costs accounted for

By James Rogers

J&J beat quarterly profit and revenue expectations and raised its dividend but didn't change its profit outlook, and the stock pulled back

Johnson & Johnson beat Wall Street's expectations for first-quarter profit and revenue on Tuesday, as strong growth in the U.S. offset weakness internationally.

The medical-technology and drug company also raised its outlook for full-year sales but kept its profit guidance intact.

The company also announced a 4.8% increase in its quarterly dividend.

The stock $(JNJ)$ slipped 1% in premarket trading, however, after running up 3.8% over the previous two sessions.

The company reported per-share earnings of $4.54 for the quarter, which includes the reversal of special charges, up from $1.34 a share in the prior year's quarter.

Adjusted for one-time items, earnings per share came to $2.77, above the $2.58 FactSet consensus.

Sales rose 2.4% to $21.89 billion, above the FactSet consensus of $21.56 billion.

U.S. sales rose 5.9% to $12.3 billion, above the FactSet consensus estimate of $12.1 billion, while international sales declined 1.8% to $9.6 billion, but that figure was still above the FactSet consensus of $9.5 billion.

By segment, J&J's innovative-medicine sales rose 2.3% to $13.873 billion, and med-tech sales rose 2.5% to $8.02 billion.

The New Brunswick, N.J.-based company raised its full-year sales guidance to a range of $91 billion to $91.8 billion, from its prior outlook of $89.2 billion to $90 billion. J&J said its outlook includes expected costs associated with tariffs announced by the Trump administration.

Related: Why drug stocks are no longer a safe haven from the stock market's turmoil

"The power of Johnson & Johnson's uniquely diversified portfolio was on full display this quarter, with strong operational sales growth reinforcing our confidence in 2025 guidance," Chief Executive Joaquin Duato said in a statement.

Johnson & Johnson maintained its full-year 2025 adjusted earnings outlook of $10.50 to $10.70 a share, or 6.2% growth from a year ago at the midpoint.

In a note released Tuesday, Edward Jones maintained its buy rating for Johnson & Johnson. "JNJ is one of the largest and most diverse health care companies in the world, which creates advantages. JNJ's earnings growth should accelerate, driven by newly launched drugs and its focus on growing the device business," analyst John Boylan wrote.

"New products are in growing therapeutic areas such as cancer and stroke prevention," Boylan added. "We expect new specialty-focused products such as Carvykti (multiple myeloma) to help drive growth."

In a separate announcement, Johnson & Johnson announced a 4.8% increase in its quarterly dividend, lifting it from $1.24 to $1.30 a share. Shareholders of record on May 27 will be paid the new dividend on June 10.

Based on Monday's closing price of $154.36 on the New York Stock Exchange, the new annual dividend rate implies a yield of 3.37%, which is more than double the implied dividend yield for the S&P 500 index SPX of 1.42%.

Johnson & Johnson shares have gained 6.7% this year through Monday, while the S&P 500 has dropped 8.1%.

-James Rogers

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 15, 2025 09:26 ET (13:26 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.