Johnson & Johnson Earnings Recap: Beats Estimates By Four Cents

On Tuesday morning, Johnson & Johnson (NYSE: JNJ) reported its fourth quarter results. The company announced an EPS of $1.24, beating the consensus estimate by four cents. Revenue of $18.40 billion came in $450 million higher than the consensus estimate. The company benefited from domestic sales, which grew 7.4 percent, and international sales growing by 2.4 percent.

“Johnson & Johnson delivered strong results in 2013 led by the outstanding performance in our Pharmaceutical business, the strength of key brands in our US OTC and other Consumer businesses,” said Alex Gorsky, chairman and CEO. “We also advanced our longer term growth drivers, bringing innovative solutions to the global healthcare market and executing with excellence.”

Pharmaceutical sales rose 13.1 percent year over year to $7.3 billion. Immunology sales rose 22.6 percent, infectious diseases rose 9.9 percent, oncology rose 37.4 percent and neurosciences rose 0.7 percent.

Medical devices and diagnostics sales rose 1.5 percent year over year to $7.31 billion, as domestic sales fell 1.4 percent and outside of the U.S. sales rose 3.7 percent. Of note, cardiovascular sales rose 8.3 percent, while diabetes sales fell 11.9 percent.

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Consumer sales rose 4.4 percent year-over-year to $3.75 billion. Of note, women's health sales fell 11.5 percent, while skin care rose 9.5 percent.

The company projected its 2014 earnings to come in a range of $5.75 to $5.85 per share. The current consensus estimate for is $5.85.

Shares were trading lower by 1.9 percent going in to the afternoon session.

RBC: Buying opportunity

Glenn Novarro, analyst at RBC Capital Markets felt that the company has a history of being conservative in earnings forecasts.

“We believe this will set up management to beat and raise throughout the year. We continue to recommend [Johnson & Johnson] based on strong growth in pharmaceuticals and under-appreciated operating margins,” Novarro said in a note to clients following the company's earnings release.

Shares are Outperform rated with a price target of $104.00.