Johnson & Johnson Earns $1.29 a Share

Good news and bad news this morning from Johnson & Johnson (JNJ), one of our Buy List stocks. The good news is that the company reported Q1 earnings of $1.29 per share which beat Wall Street’s estimate by two cents a share. Woo hoo! Revenues rose by 4% to $15.63 billion which was a teeny bit better than expectations.
The bad news is that the company pared back its full-year EPS guidance due to foreign exchange rates. JNJ’s initial full-year guidance was a range of $4.85 to $4.95. They’ve pulled each end down a nickel to a new range of $4.80 to $4.90.
Truthfully, the bad news isn’t very bad. I’m never terribly worried about things outside a company’s control like foreign exchange. If they had experienced an issue related to their operations, that would have been one thing. Foreign exchange is one of those things you simply have to deal with. Sometimes it helps you, sometime it doesn’t. It’s a bit like playing against the wind in football.
The lowered guidance also includes the impact of Obamacare which JNJ pegs at 10 cents per share and a revenues loss of $400 million. Overall, JNJ is still trading at less than 14 times this year’s estimate which is less than the broader market. JNJ remains an excellent buy.

Posted by on April 20th, 2010 at 9:58 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.