J&J’s profit slides 35% as coronavirus forces hospitals to forgo elective surgeries

Johnson & Johnson‘s second-quarter profit slid 35% from the same time last year as the coronavirus pandemic forced hospitals to postpone elective surgeries, hitting the company’s medical device business hard.

J&J earned $3.63 billion, or $1.36 per share, during the three months ended June 30, a 34.6% drop from $5.6 billion a year earlier as sales in its medical device unit fell, the company said Thursday. The decline in its medical device unit was partially offset by higher sales for its over-the-counter products such as Tylenol and its Listerine mouthwash. 

Shares of J&J were less than 1% higher in premarket trading. 

Overall, the company beat earnings expectations, reporting adjusted earnings of $1.67 per share, higher than the $1.49 per share expected by Refinitiv analysts. The company generated $18.3 billion in revenue, higher than the $17.6 billion expected but a 10% decline from a year ago. 

The company raised its full-year guidance, expecting adjusted earnings of between $7.75 per share to $7.95 per share from $7.50 to $7.90 per share. It also raised its sales forecast to between $79.9 billion to $81.4 billion from $77.5 billion to $80.5 billion.

“Our second quarter results reflect the impact of COVID-19 and the enduring strength of our Pharmaceutical business, where we saw continued growth even in this environment,” J&J CEO Alex Gorsky said in a press release. “Thanks to the tireless work of our colleagues around the world and our broad range of capabilities, we continue to successfully navigate the external landscape, and we remain focused on advancing the development of a vaccine to help address this pandemic and save lives.”

J&J’s pharmaceutical business, which is working on a coronavirus vaccine, generated $10.7 billion in revenue, a 2.1% year-over-year increase. The company’s consumer unit, which makes products such as Listerine mouthwash, generated $3.2 billion in revenue, down 7% from a year earlier. 

Sales in J&J’s medical-device unit fell by 33.9% to $4.2 billion during the quarter as the pandemic forced hospitals to postpone elective surgeries and Americans stayed home.

J&J is one of several companies working on a potential vaccine for Covid-19, which has infected more than 13 million people worldwide and killed at least 584,000, according to data compiled by Johns Hopkins University. 

The company plans to enter a phase one human trial next week, Chief Financial Officer Joseph Wolk said in an interview on CNBC’s “Squawk Box” on Thursday. 

This is a developing story. Please check back for updates.