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How did Johnson & Johnson beat expectations?
Johnson & Johnson Co. pharmaceuticals division has pushed first quarter profits past analysts’ expectations.
The company’s stock rose 2.5 percent after it reported Q1 profits before the market opened on Tuesday morning. Quarterly sales increased to USD 18.12 billion from USD 17.51 billion last quarter.
Damien Conover, Director of Healthcare Research at Morningstar, points out that Johnson & Johnson’s growth is coming from the pharmaceuticals department which rose 10.8 percent this quarter. The company’s medical device group and consumer group divisions showed levels of little or flat growth. Johnson & Johnson’s CEO, Alex Gorsky attributed the quarter’s strong performance to “successful new product launches and the continued growth of key products.”
Johnson & Johnson’s strong performance is expected to continue into next year. Product sales within the pharmaceutical division maintain the highest profit margins, which Conover expects to have an “amplified impact on the bottom line” over the next several quarters.
Investors expect the announcement of a dividend increase in the coming weeks.
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