J&J suspends sales forecast for COVID vaccine, cuts profit view

J&J had previously predicted approximately $3.5 billion in 2022 sales

Johnson & Johnson on Tuesday said it could no longer provide a forecast for sales of its COVID-19 vaccine, as vaccine hesitancy in low-income countries paired with already low demand in higher-income nations has led to a glut of supply.

The company had earlier predicted as much as $3.5 billion in 2022 sales from the single-dose vaccine, once touted as an important tool for vaccinating hard-to-reach areas.

J&J also cut both ends of its full-year profit forecast by 25 cents and now expects to earn $10.15 to $10.35 per share. But it blamed the move on currency fluctuations rather than fundamental business issues and raised its dividend 6.6%, and shares rose about 4%.

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"With the guidance cut driven exclusively by currency, I think shares are reacting to the forward looking comments," said Edward Jones analyst Ashtyn Evans. "J&J discussed accelerating growth in medical technology through acquisitions and also the belief that supply chain issues will improve in the second half of the year."

Ticker Security Last Change Change %
JNJ JOHNSON & JOHNSON 179.52 +2.01 +1.13%

Other analysts said J&J remains a safe bet within the healthcare sector and that raising the dividend provided predictable income for investors despite vaccine sales woes.

The J&J shot has been hurt by links to rare but potentially deadly blood clots, manufacturing issues and concerns about efficacy. It accounts for about 3% of all doses administered in the United States, and roughly 2% of doses in Europe.

FILE PHOTO: A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. (Reuters/Mike Blake)

Company executives said lack of acceptance in lower-income countries also was hurting vaccine sales. According to the World Health Organization, poorer countries have asked for insufficient doses to meet its goal of vaccinating at least 70% of their populations by the middle of the year.

The vaccine, which is sold at a not-for-profit price, brought in $457 million in the first quarter. J&J recorded vaccine sales of $2.39 billion last year.

Pfizer Inc has forecast $32 billion in 2022 sales from its COVID vaccine developed with BioNTech SE], while Moderna Inc has forecast $21 billion for its shot this year.

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J&J said its medical devices unit should recover this year after pandemic delays in non-urgent surgeries hit sales last year, and it expects above-market growth in its large pharmaceuticals business in 2022, despite falling short of Wall Street estimates in the first quarter.

The company reported pharmaceutical sales of $12.87 billion, well shy of forecasts for $13.6 billion, due in part to low vaccine sales.

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Excluding items, J&J earned $2.67 per share for the quarter, beating analysts' expectations by 11 cents, according to Refinitiv.