Patent expirations, weakness in Europe, and a slower than anticipated recovery in the U.S. economyare just some of the headwinds that have dented pharma’s profitability in the past couple of quarters.
However, this quarter may mark the start of a recovery in earnings growth as all of these very factors have forced drug firms to become more lean and operationally efficient.
We kick off pharma earnings this week with Johnson & Johnson on Tuesday.
Given its diversified portfolio of drugs, medical devices and consumer products, Johnson & Johnson’s report is always an important read for the quarter as it provides a preview of what we could potentially expect from its peers.
Thomson Financial is estimating a 1 percent increase in Johnson & Johnson’s quarterly sales to $16.7 billion compared to the same time last year, and a similar 1 percent jump in profit growth to $1.29 a share.
With a new CEOappointed in April, analysts want to hear from the man himself, Alex Gorsky, on his overall strategy for the firm including any future M&A plans.
In June, J&J closed out its largest acquisition to date of medical device maker Synthes, for $19.7 billion. Gorsky is also expected to highlight how the recent Supreme Court ruling on health care reform will impact Johnson & Johnson’s bottom line.
Johnson & Johnson reports on Tuesday, before the markets open.
— By CNBC's Seema Mody
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