COVID-19: Johnson & Johnson ‘built for times like this’, says CEO

15-Apr-2020 - Last updated on 15-Apr-2020 at 14:08 GMT

Johnson & Johnson says full-year 2020 earnings will be between -0.3% and 0.5% on the previous year because of the ongoing coronavirus crisis (Getty Images)

Personal care major Johnson & Johnson has lowered its 2020 guidance to reflect the impact of the ongoing coronavirus (COVID-19) crisis, despite a strong net income surge for the first quarter.

This week, Johnson & Johnson reported its earnings for the first quarter (Q1) of 2020, outlining sales of €18.9bn ($20.7bn) and a total net income of €5.3bn ($5.89bn) – up 54.6% on the previous year. Its consumer health division, with brands like Neutrogena, Aveeno, Johnson’s and Listerine, generated €3.3bn ($3.625bn) in sales for Q1, up 9.2% on the previous year.

Alongside its results, the personal care major reduced its full-year 2020 guidance, citing the impact of the ongoing COVID-19 pandemic, and forecasted operational sales to stand at €72.6bn - €75.4bn ($79.2bn - $82.2bn), down from €78.3bn - €79.1bn ($85.4bn - $86.2bn) initially forecast in January. Rather than growing 5-6% on the previous year, full-year earnings would now sit at -3.0% to 0.5% on the previous year.

Johnson & Johnson ‘built for times like this’

Speaking to investors in its Q1 earnings call yesterday, Alex Gorsky, chairman and CEO of Johnson & Johnson, said: “Johnson & Johnson was built for times like this and our strong first quarter results are just one reflection of our sustainable business model.”

The company had four “pillars of strength” that enabled it to be resilient and responsive during the current crisis, Gorsky said – its equal commitment to performance and purpose; being a broadly-based healthcare company; its scientific expertise; and global operational scale and capabilities.

“…We recognise the challenges that individuals, companies and the world are facing right now, but as we look forward, we are confident that together we will win this fight against the COVID-19 pandemic. And we are maintaining a long-term view of optimism.”

Consumer health earnings breakdown

Chris DelOreFice, vice president of investor relations at Johnson & Johnson, told investors the consumer health business had seen strong growth, primarily driven by demands associated with COVID-19, particularly across skin health, oral care and women’s health. There had, however, been some net negative impact on skin health in China and Asia-Pacific, he said.

Strong performers within the global business unit for Q1 had been Neutrogena, Aveeno, Listerine and Stayfree.

Baby care declined globally by 4.9%, DelOreFice said, primiarly in the EMEA region and largely due to SKU rationalisation action and the ongoing coronavirus crisis.

Johnson & Johnson’s strong Q1 earnings follow a stable set of full-year 2019 results that saw marginal growth in consumer health driven by Neutrogena’s strong performance and innovation efforts in anti-ageing and cleansing.