Here’s Why Johnson & Johnson Had a Crazy Good First Quarter

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Source: http://www.flickr.com/photos/59937401@N07/

Source: http://www.flickr.com/photos/59937401@N07/

Shares of Johnson & Johnson (NYSE:JNJ) jumped 2.12 percent on Tuesday after the healthcare and pharmaceutical company reported strong first-quarter results. Sales increased 3.5 percent on the year to $18.1 billion, beating the mean analyst estimate of $18 billion. Adjusted net earnings increased 7.8 percent on the year to $4.4 billion, and diluted earnings increased 6.9 percent on the year to $1.54 per share, beating the mean analyst estimate of $1.48 per share.

Sales growth was particularly strong. Worldwide pharmaceutical sales increased 10.8 percent on the year to $7.5 billion in the first quarter — the product of 12.2 percent operation growth and currency headwinds of 1.4 percent. Domestic sales increased increased 7.7 percent, while international sales increased 16.9 percent with a negative currency impact of 2.9 percent.

Chairman and CEO Alex Gorsky provided the obligatory executive statement: “Johnson & Johnson delivered strong first-quarter results driven by successful new product launches and the continued growth of key products,” Gorsky said in the earnings release. “Our talented colleagues around the world continue to bring meaningful innovations to patients and customers, addressing significant unmet needs. We also advanced our near-term priorities and long-term growth drivers, positioning us well to deliver sustainable results.”

Those product releases are of particular note. While “primary contributors” to sales growth were flagship drugs like Stelara, Invega, Prezista, and Velcade, new products like Olysio, Zytiga, Xarelto, and Invokana were also major contributors. On the downside, loss of exclusivity for Aciphex and Concerta weighed on sales.

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