Research costs hit Johnson & Johnson third quarter earnings

Johnson & Johnson reported a decline in third-quarter earnings despite a rise in sales, as increased research and development costs weighed on its bottom line.

The New Brunswick, New Jersey-based healthcare giant posted net earnings from continuing operations of USD 2.69 billion, down 38% from USD 4.31 billion in the same quarter last year. Diluted earnings per share fell 34% to USD 1.11 from USD 1.69.

Sales climbed 5.2% to USD 22.47 billion, up from USD 21.35 billion, but were offset by a 44% surge in R&D spending, which rose to USD 4.95 billion from USD 3.45 billion. The cost of sales also increased 5.4% to USD 6.96 billion.

Johnson & Johnson announced a fourth-quarter dividend of USD 1.24 per share, a 4.2% increase from the previous year.

Chair and CEO Joaquin Duato highlighted the company's progress, stating, "Our strong third-quarter results reflect the breadth of our business and our commitment to advancing healthcare innovation. With regulatory approvals for Tremfya and Rybrevant, we remain confident in both our near- and long-term growth targets."

In light of these results and the recent USD 600 million acquisition of heart failure treatment developer V-Wave Ltd., the company revised its full-year 2024 guidance. Estimated reported sales are now expected between USD 88.4 billion and USD 88.8 billion, up slightly from the previous forecast of USD 88.0 billion to USD 88.4 billion. Adjusted diluted EPS guidance was lowered to a range of USD 9.88 to USD 9.98, from the prior outlook of USD 9.97 to USD 10.07.