Health and Science

J&J expects more than $3 billion in Covid vaccine sales this year in mixed quarterly report

Key Points
  • J&J expects its Covid vaccine to generate $3 billion to $3.5 billion in sales this year.
  • The company beat on fourth-quarter earnings but missed on revenue.
  • Its revenue of $24.8 billion rose 10.4% over the same quarter in 2020, mostly driven by $1.82 billion in international sales of its Covid vaccine.

In this article

The Janssen Johnson & Johnson COVID-19 vaccine.
Allen J. Schaben | Los Angeles Times | Getty Images

Johnson & Johnson on Tuesday projected that its Covid vaccine would generate $3 billion to $3.5 billion in sales in 2022, after posting a mixed fourth-quarter report that slightly beat on earnings estimates but missed on revenue.

Here's how J&J performed compared with what Wall Street expected, based on analysts' average estimates compiled by Refinitiv:

  • Adjusted EPS: $2.13, vs. $2.12 expected.
  • Revenue: $24.8 billion, vs. $25.29 billion expected

On an unadjusted basis, J&J's fourth-quarter profit surged to $4.74 billion, almost triple the $1.74 billion it earned during the same quarter the previous year. Its revenue of $24.8 billion rose 10.4% from $22.48 billion during the same quarter in 2020, mostly driven by $1.82 billion in international sales of its Covid vaccine.

The company's shares were up more than 1% in late-morning trading.

CFO Joseph Wolk told CNBC a strengthening dollar negatively impacted sales by $150 million to $200 million. Hospital staffing shortages caused by the Covid omicron variant also generated uncertainty in the company's medical devices business, particularly with elective procedures, Wolk said. The consumer health division was hit by supply constrains in raw materials, labor shortages among third-party manufacturers and higher transportation costs, he added.

"We think those are short-lived," Wolk told CNBC's Meg Tirrell on "Squawk Box." "We think the second half of 2022 will be stronger than the first half, but some of these dynamics continue into the early part of this year."

J&J reported $93.77 billion in sales in 2021, a 13.6% increase over the prior year. The company's pharmaceutical division generated $52.08 billion in revenue, a 14.3% year-over-year increase. J&J's medical devices business reported sales of $27.06 billion in 2021, a 17.9% increase compared with 2020. The consumer health section posted $14.63 billion in revenue, a 4.1% increase.

J&J said it expects to generate $10.40 to $10.60 in earnings per share this year and $98.9 billion to $100.4 billion in revenue.

Wolk said the company had its lowest level of net debt, $2 billion, in almost five years and is getting closer to a net positive cash position. J&J has $32 billion in cash and marketable securities and $34 billion in obligations. The company's free cash flow was $20 billion at the end of 2021, he said.

CEO Joaquin Duato, who officially took the reins from Alex Gorsky earlier this month, said J&J is looking at acquisition opportunities, particularly smaller companies that can be fully absorbed, though J&J will also consider medium-sized opportunities.

"We are constantly looking at M&A as a key source of growth for our business. Our position in cash today makes us be more aggressive in that area," Duato said during J&J's earnings call.

However, Duato said larger deals will have a higher bar because they are more challenging from a financial perspective.

J&J is also splitting its consumer products business from its pharmaceutical and medical device operations to create two publicly traded companies. J&J expects to complete the transaction by the end of 2023.

Wolk said J&J will announce the consumer health company's name as well as its headquarters in the middle of 2022. J&J will also announced key leadership positions this year.

The fourth-quarter results mark the end of a difficult year for J&J. Public confidence in the company's single-shot Covid vaccine took a hit in December, when the Centers for Disease Control and Prevention recommended Pfizer's and Moderna's vaccines over J&J's shot. The CDC found dozens of people, mostly younger women, developed a rare blood clot condition after receiving J&J's vaccine.

In June, J&J lost its appeal to have the Supreme Court review $2.1 billion in damages that a lower court awarded to women who said asbestos in the company's talc powder caused ovarian cancer.

Correction: J&J's medical devices business reported sales of $27.06 billion in 2021. An earlier version misstated the figure.