New Jersey-based health-products company, Johnson & Johnson announced its fourth-quarter adjusted earnings, revealing that it topped Wall Street’s estimates. Still, the sales of its medical devices have declined since 2018.
"We delivered strong underlying sales and earnings growth in 2019, driven by the strength of our Pharmaceutical business, accelerating performance in our Medical Devices business and improved profitability in our Consumer business," said Alex Gorsky, Chairman and Chief Executive Officer. "As we enter into 2020 and this next decade, our strategic investments focused on advancing our pipelines and driving innovation across our entire product portfolio, position us well to deliver long-term sustainable growth and value to our shareholders."
Sales in its medical-devices business fell to $6.63 billion, half a per cent down from the same quarter last year, reflecting an operational increase of 0.2% and negative currency movement of 0.7%. In total, medical devices fell around 3.8 percent for the year; from $26 billion in 2018 to $25 billion in 2019. Some product segments, including contact lenses and artificial hips experienced sales growth though a notable drop in surgical products weighed on the medical-device unit.
But it wasn’t all bad news. The company also reported net income of $4.01 billion, or $1.50 a share, compared with $3.04 billion or $1.12 a share in Q4 2018. The company expects adjusted operational sales to grow 5% to 6% this year. J&J also announced that it is targeting a 20% reduction in its carbon emissions this year while aiming to procure 35% of its electricity from renewable resources.
During the earnings call, Gorsky suggested that the company is “committed to building upon this momentum in 2020.” He also shared that J&J “will be hosting our Medical Device Business Review Day on May 13th to highlight the strategies that we believe will drive further growth and provide additional insights into the team's plans in digital surgery.”
While the company celebrates its earnings, it’s also important to note that its year was riddled with a series of lawsuits. From claims that its talc-based baby powder causes cancer to allegations that the company had a hand in fueling the opioid epidemic. In August, an Oklahoma judge ordered the company to pay $572 million for its contribution to the state's opioid-addiction crisis.
Despite the litigation, J&J share prices have increased by more than 2% this year.