J&J’s Device Unit Fails to Meet Sales Expectations
Source: Business of MDDI
Johnson & Johnson beat Wall Street expectations in 3Q18, fueled mostly by its pharmaceutical unit, but that doesn’t mean every business from the New Brunswick, NJ-based company is firing on all cylinders. J&J noted its medical device unit was a bit behind and actually missed expectations.
Total medical device sales came in at about $6.59 billion missing expectations of $6.64 billion.
Overall, J&J reported third-quarter net income of $3.93 billion, or $1.44 per share, up from $3.76 billion, or $1.37 per share a year earlier. The performance pushed the company to adjust its overall outlook to an earnings per share of $8.13 to $8.18. This was up from prior guidance of $8.07 to $8.17. Johnson & Johnson said it expected sales of $81 billion to $81.4 billion which differs from earlier guidance of $80.5 billion to $81.3 billion.
"We are pleased with our strong third-quarter performance, which reflects continued above-market growth in our Pharmaceutical business, accelerating sales momentum in our Consumer business and consistent progress in our Medical Devices business," Alex Gorsky, Chairman and CEO for J&J, said in a release. "I'm confident that with our collaborative and inspired J&J colleagues around the world, unique broad-based business model and strategic investments in innovation, we are well positioned for success today and into the future."
Although pharmaceutical sales were solid, devices were a different story. For the past few years, the company has struggled with the medical devices unit. In January of 2016 J&J cut up to 6% of its workforce in the medical device field.
J&J also began the divestiture of its diabetes unit LifeScan, the company's blood glucose monitoring unit known for its OneTouch brand of glucose meters and insulin pumps. In June, the firm said that Platinum Equity was acquiring LifeScan for $21.1 billion.
In addition, the company has been divesting several of its device product lines.