Johnson & Johnson Reports 4% Sales Growth for the Second Quarter

- By Julie Young

Johnson & Johnson (JNJ) reported its second quarter 2016 earnings results on Tuesday, July 19. The company beat both revenue and earnings estimates for the quarter, helping to fuel continued momentum in U.S. stocks and the health care industry. For the quarter, revenue was $18.48 billion, beating analysts' average estimate by $500 million. Revenue was also up 4% from the comparable quarter. Earnings for the second quarter were $1.74 beating analysts' estimate by 6 cents.


Johnson & Johnson reported strong growth across nearly all of its segments resulting in the positive sales growth of 4%. Sales were higher than the comparable quarter in every segment except consumer where international sales dragged on revenue. The firm's pharmaceutical business continued to grow significantly with sales up 9%.


"We saw notable strength in our pharmaceuticals business due to the continued success of new products, and also achieved significant clinical milestones, advancing our robust pipeline," said Alex Gorsky, Chairman and Chief Executive Officer of Johnson and Johnson.



The strong results for the quarter helped Johnson & Johnson to increase its full year revenue and earnings guidance. In its second quarter comments, it reported sales guidance for 2016 at $71.5 billion to $72.2 billion. Also, the company now expects earnings per share for 2016 to be between $6.63 and $6.73 per share. The positive results and improved outlook helped the company's shares to trade higher on Tuesday after the earnings announcement. On Tuesday, the stock closed at $125.25.

For the year Johnson & Johnson has been steadily gaining. Year to date the stock has gained 21.58%, leading among its health care peers. For the year, the health care sector has gained 3.85% and Johnson & Johnson is among the top stock leaders in the sector:

Edwards Lifesciences (EW) 34.54%

St Jude Medical (STJ) 33.04%

Stryker (SYK) 32.69%

Boston Scientific (BSX) 29.72%

Intuitive Surgical (ISRG) 26.51%

Johnson & Johnson (JNJ) 23.35%

Zimmer Biomet Holdings (ZBH) 22.59%

C.R. Bard (BCR) 22.57%

UnitedHealth Group Inc. (UNH) 22.40%

In a recent market report, The Street's Jim Cramer had the following insights about Johnson & Johnson and its second quarter.

Disclosure: I do not own any shares of Johnson & Johnson.

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