Johnson & Johnson reported first-quarter sales of $24.06 billion, exceeding market expectations and prompting the company to raise its full-year forecast.
The healthcare giant has a strong track record, topping earnings-per-share expectations 95% of the time, according to data from Bespoke Investment Group. However, the stock has historically seen only a modest 0.3% average gain on earnings days.
Shares of Johnson & Johnson have gained 15 percent year-to-date, outperforming the flat performance of the S&P 500. The key question for investors is whether the strong results can fuel further gains or if profit-taking will follow the stock's recent run-up.
The company now expects full-year sales to be between $100.3 billion and $101.3 billion, an increase from its previous guidance. The consensus analyst estimate was for $100.63 billion. Johnson & Johnson also forecast a full-year adjusted earnings per share between $11.45 and $11.65. The first-quarter adjusted EPS of $2.70 was down 2.5 percent from $2.77 in the same period a year earlier.
The report from Johnson & Johnson helps kick off a busy earnings season, with investors looking for corporate guidance amid geopolitical tensions between the U.S. and Iran. Other major companies reporting this week include JPMorgan Chase, Wells Fargo, and Netflix. Despite headwinds from higher energy prices, analysts expect S&P 500 first-quarter profits to have grown 13 percent from the year-earlier period, per FactSet data.
The raised guidance signals management's confidence in sustained demand for its products. Investors will now look to the upcoming earnings calls from other healthcare and pharmaceutical companies to gauge the sector's overall strength.
This article is for informational purposes only and does not constitute investment advice.
