J&J slashes outlook, races to develop coronavirus vaccine

1010 WINS Newsroom
April 14, 2020 - 7:59 am

FILE - This Oct. 21, 2019, photo shows Johnson's Baby Aloe & Vitamin E Powder in Salt Lake City. Johnson & Johnson reports financial results Tuesday, April 14, 2020. (AP Photo/Rick Bowmer, File)

Johnson & Johnson, anticipating significant impact from the COVID-19 pandemic, slashed its 2020 sales forecast by billions of dollars and also cut its profit expectations.

It's one of the first major U.S. corporations to report first-quarter earnings and likely a harbinger of things to come as the outbreak disrupts the global economy.

The world’s biggest health products maker on Tuesday said it now expects 2020 revenue of $77.5 billion to $80.5 billion, down a January forecast of $85.4 billion to $86.2 billion. It also forecast adjusted earnings per share of $7.50 to $7.90, down from the January forecast of $9 to $9.15 per share.

J&J faces both the prospect of lower sales as much of the world stays home to avoid infection, and higher costs as it races to develop a vaccine against the new coronavirus.

“We are committed to beginning production at risk imminently and bringing an affordable and accessible vaccine to the public on a not-for-profit basis for emergency pandemic use,” Cheif Executive Alex Gorsky said in a statement.

The maker of Tylenol and baby shampoo reported a very strong first quarter, with net income up 55%. But that was largely before the outbreak sent the global economy on a new tangent.

Net income was $5.8 billion, or $2.17 per share. That's up from $3.7 billion, or $1.39 per share, in 2019′s first quarter.

Earning after adjusting for one-time items came to $6.2 billion, or $2.30 per share.

The profit easily beat Wall Street per-share expectations of $2.03 per share.

J&J, based in New Brunswick, New Jersey, posted revenue of $20.69 billion, which also beat Street forecasts. Wall Street expected $19.25 billion.

Shares jumped about 4% before the opening bell.

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