Johnson & Johnson
on Wednesday issued new financial guidance after spinning out the consumer-health company
Kenvue.
While its earnings and sales projections were lowered on an absolute basis, the company is maintaining its dividend and expects to increase its revenue at a faster pace.
Johnson & Johnson
(ticker: JNJ) is set to lose earnings from what is now
Kenvue
(KVUE). However, that will be offset by a lower share count in calculating earnings per share, given that investors enthusiastically took up the exchange offer for converting J&J shares to those of Kenvue.
The drug maker now expects full-year reported sales of $83.2 billion to $84 billion, down from a previous forecast of $98.8 billion to $99.8 billion. The new figure represents sales growth of 7% to 8%, compared with 6.5% to 7.5% previously.
The company now expects adjusted earnings of $10 to $10.10 a share, representing growth of 12% to 13%. That compares with a previous estimate of $10.70 to $10.80, with growth of 5.5% to 6.5%.
Johnson & Johnson maintained its quarterly dividend of $1.19 a share. At the stock’s Tuesday closing price of $164.31, that implies an annual dividend yield of 2.9%.
Kenvue is set to join Johnson & Johnson in the S&P 500 Dividend Aristocrats Index, which houses
S&P 500
companies that have raised their dividends for at least 25 consecutive years.
“The completion of this transaction uniquely positions Johnson & Johnson as a pharmaceutical and medtech company focused on delivering transformative healthcare solutions to patients,” said CEO Joaquin Duato.
Johnson & Johnson shares were up 0.2% at $164.70 in early trading.
Write to Adam Clark at [email protected]
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