
JNJ Reports Strong 3Q23 Results But Global Med-Tech Sales Deaccelerate; Read Throughs for Other Companies
Johnson & Johnson, a global healthcare company, has released its financial results for the third quarter of 2023, reporting sales of $21.4 billion, representing a growth of 6.8% compared to the same period in 2022. Analysts had been expecting total revenue of $21.0 billion. When excluding the impact of the COVID-19 vaccine, the company achieved operational growth of 9.0%. The company reported adjusted earnings per share (EPS) of $2.66, reflecting growth of 19.3% and beating consensus forecasts of $2.52. Most of Johnson & Johnson’s growth was attributable to its U.S. operations, with reported sales of $11.996 billion, showing an 11.1% increase. The international segment reported sales of $9.355 billion with a 1.6% increase. Total MedTech segment revenue was $7.458 billion, marking a 10.0% increase. The company raised its full year guidance range and now expects total sales of $84.4B to $84.8B compared to previous guidance of $83.6B to $84.4B.
Looking at key readthroughs for medical technology, overall U.S. med tech sales growth declined in the quarter to 11.6% from 14.6% last quarter.
Abiomed sales with its Impella heart pump were down roughly 5% in the quarter, similar with the second quarter. The company had been growing in the high single digits prior to the completion of the acquisition early in the year. Abiomed has faced regulatory challenges and recently received an FDA warning letter.
Electrophysiology sales in the quarter were $1.16B up 19.3% year-over year. This is down from the $1.2 billion reported in the second quarter. JNJ is the global leader in ablation technologies for atrial fibrillation, however both Boston Scientific and Medtronic are poised to launch new pulse field ablation systems prior to JNJ, with Boston Scientific’s technology already available in Europe. This could change share dynamics in the $8 billion electrophysiology market.
Global orthopedic sales were $2.16B and also declined sequentially from the 2Q23 sales level of $2.27B. Year-over-year growth slowed from 5% last quarter to 3.4% this quarter. There has been some signs in terms on internet search activity of elective procedures slowing, and this could be a read-through for other orthopedic players including Stryker, Zimmer Biomet, Smith & Nephew, and others.
Products from Ethicon including adjunctive hemostats, energy sealing and dissecting, reflux management, microwave ablation, robotics with its Monarch system, surgical stapling, and wound closure were $2.48B compared to $2.59B last quarter and grew 5.9% worldwide.
Finally, the company’s vision segment had total sales of $1.26B compared to $1.31 in the last quarter and grew 5.4% year-over-year. Notably, U.S. contact lens sales declined year-over-year as did surgical procedures. This has potential read-throughs for STAAR Surgical, Sight Sciences, Glaukos Corporation, and RxSight as well as major contact lens manufacturers Alcon and Bausch and Lomb.