Johnson & Johnson's first-quarter profit drops 23% on poor consumer business

New Jersey company's net profit dropped to $4.8bn in three months to end of June

Johnson & Johnson's sales during the second quarter increased 3 per cent annually to more than $24 billion. AP

Johnson & Johnson’s net profit dropped about 23 per cent on an annual basis in the second quarter, underpinned by poor performance of its consumer and MedTech businesses.

Net profit dropped to almost $4.8 billion in the three months to the end of June, from the same period a year earlier. It was nearly 6.5 per cent down on a quarterly basis.

Revenue during the second quarter increased 3 per cent annually to more than $24bn, exceeding analysts’ expectations of $23.7bn.

The New Jersey company earned almost half of its revenue, or nearly $11.8bn, from international markets and the rest from the US in the second quarter.

“Our solid second quarter results … reflect the strength and resilience of our company’s market leadership in the midst of macroeconomic challenges,” J&J’s chief executive Joaquin Duato said.

“I am continually energised by the focus and passion of my colleagues and their dedication towards delivering transformative healthcare solutions to patients and consumers around the world."

The company’s shares dropped nearly 1.5 per cent to $171.60 on Tuesday before surging slightly to $171.90 in the after-hours trading.

The firm also cut its full-year adjusted profit forecast due to a stronger dollar. It now expects full-year adjusted profit of $10 to $10.10 a share, compared with its April forecast of $10.15 to $10.35.

In the April-June period, J&J earned more than 55.4 per cent of its revenue from the pharmaceutical business that developed the Covid-19 vaccine.

The division added about $13.3bn, 6.7 per cent more year on year, to overall sales in the June quarter.

The company’s MedTech business dropped 1.1 per cent annually to $6.8bn in the second quarter.

Growth was partially offset by the Covid-19 related mobility restrictions in China, the world’s biggest consumer market.

Its consumer health business, which makes products such as Neutrogena face wash and Listerine, constituted about 15.8 per cent or $3.8bn of overall sales during the quarter.

The company’s Covid-19 vaccine, which has had sluggish demand in the past months, added $544m in sales in the second quarter, compared to $164m it earned in the same period last year.