TOPLINEShares of pharmaceutical and consumer goods giant Johnson & Johnson jumped on Tuesday after the company raised its dividend—even after lowering its forecast for the rest of the year—and beat revenue and profit estimates thanks to higher demand during the coronavirus pandemic.
Johnson & Johnson, which saw a spike in sales of Tylenol, is the first major drugmaker to report … [+]
Mark Ralston/AFP/Getty Images
The company saw its first quarter profits surge amid higher demand for over-the-counter medicine and packaged consumer goods during the ongoing coronavirus health crisis.
Johnson & Johnson reported profits of $2.30 per share—higher than the $2 per share forecast by analysts, and sales rose 3.3% from a year ago to $20.7 billion, compared to the $19.5 billion analysts expected.
The company said that sales of consumer products, including Tylenol and Zyrtec, rose nearly 10% as consumers sought to use over-the-counter medicines to reduce fever and other symptoms associated with coronavirus.
The stock also jumped on news that the company raised its quarterly dividend by 6.3%, from 95 cents per share to $1.01 per share—a pleasant surprise for investors who have been bracing for the impact of Covid-19 on corporate earnings reports.
The dividend increase came even as the company lowered its full-year forecast for 2020, saying that it expects a decline in sales and higher expenses as it spends more in response to the pandemic.
Johnson & Johnson has also been working on an experimental vaccine for the coronavirus: The company said in late March that it plans to begin human trials for the vaccine by September and that it could be widely available by 2021.
“The dividend this morning is a real good sign of the strength of the company,” Chief Financial Officer Joseph Wolk said in an interview with CNBC after earnings were released. “We’re in a great financial position,” he said, adding that the market is “confident” in Johnson & Johnson JNJ .
The stock surged nearly 5% on the news. Shares of Johnson & Johnson are up 2.4% over the last 12 months, but down 4.3% so far in 2020.