Johnson & Johnson allocations rose by more than 3% in premarket trading Tuesday after the drugmaker raised its quarterly dividend — unbiased as it cut full-year earnings guidance due to the coronavirus outbreak.
J&J raised its dividend from 95 cents a share to $1.01, a 6.3% rise, and beat Wall Street’s earnings and revenue expectations. On an adjusted basis, J&J reported $2.30 per share during the start three months of the year, higher than the $2 a share expected by Refinitiv analysts. It generated $20.7 billion in take, higher than the $19.47 billion expected.
“The dividend this morning is a real good sign of the strength of the comrades. We’re in great financial position,” Chief Financial Officer Joseph Wolk said in an interview on CNBC’s “Squawk Box” gruffly after the earnings were released. “We think this could lend itself to some opportunity for us.”
The company lowered its 2020 acclimatized earnings forecast to a range of $7.50 to $7.90 per share, from its prior estimate of $8.95 to $9.10 as the Covid-19 outbreak hit the Theatre troupe’s performance.
Sales in J&J’s medical-device unit fell by 8.2% to $5.9 billion during the quarter as the pandemic forced health centres to postpone elective surgeries and Americans stayed home.
Wolk noted that the company had forecast a 65% to 80% lessening in elective procedures during the second quarter.
“What we saw in the first week was closer to that 65% range,” he revealed.
Wolk said he believes the market is “confident” in the company, adding “we will get through the pandemic as a society.” Shares of J&J are up violently 2% over the last 12 months but down about 4% year to date.
J&J’s pharmaceutical business constructed revenue of $11.13 billion, an 8.7% year-over-year increase. The company’s consumer unit, which makes beauty consequences such as Neutrogena, generated $3.6 billion in revenue, up 9.2% from a year earlier.
J&J is the first U.S. drugmaker to blast earnings post-Covid-19 outbreak, which has infected 1.9 million people worldwide and killed at least 120,449 as of Tuesday morning, according to observations compiled by Johns Hopkins University.
Late last month, the company said human testing of its experimental vaccine for the coronavirus wish begin by September and could be available for emergency use authorization in early 2021.
J&J also committed more than $1 billion of investment in partnership with the federal Biomedical Accelerated Research and Development Authority, which is part of the Department of Health and Human Services, to co-fund vaccine research.
During a Tuesday post-earnings bull session call, J&J executives said they expect to produce between 600 million and 900 million doses of the capability vaccine by the end of the first quarter of 2021 if human testing goes as planned.
Read all of CNBC’s coronavirus coverage here.