Shares in leading US pharmaceutical firm Johnson & Johnson are trading higher by around half a percent pre-market on Monday. Stock prices in the company have traded higher across the month,. Prices have extended gains despite a reported Q2 earnings miss.
7% Sales Drop
Johnson & Johnson reported earnings per share of $1.36 over the June quarter. This undershot expectations of a $1.49 EPS. The company posted sales of $18.3 billion over the quarter. This marked a 10.8% decline in global sales versus the same period last year. Total net income was lower by 34.6% over the quarter, moving down to $3.62 billion.
Looking at the breakdown of the company’s businesses, the consumer health division posted revenues of $2.88 billion in Q2. This is a 7% decline on the same quarter a year prior. However, sales in the US were seen rising by 1.3% over the period.
Specific Impact From COVID-19
The company cited the downward drag from the COVID-19 pandemic as the main cause of its loss of earnings over the period. In terms of specific impact, the company noted its women’s health care and international baby care as the hardest hit divisions.
Johnson & Johnson’s Vice President of Investor Relations, Chris DelOrefice, noted that the firm’s skin, health and beauty businesses had seen a 14.3% drop in global sales. He further noted that it was the sector “most negatively impacted by COVID-19 due to changes in consumer’s skin health and beauty routines”.
Oral Care Outperformed
DelOrefice said that the downside impact had been even more pronounced in the US. Skin, health, and beauty sales had dropped by 19.2% as a result of reductions in sun care, cosmetics, and facial care products.
However, despite the negative impact from the pandemic, DelOrefice went on to say that the company’s oral care sales had been “positively impacted”.
Adding detail to this statement, DelOrefice said:
“excluding the negative impact of COVID-19, our consumer health segment delivered sold performance, with continued strong performance in our over-the-counter and oral care business”.
Johnson & Johnson Shares Continue Higher
Shares in Johnson & Johnson have rallied firmly over the last two months moving up from lows below the 140 mark. Prices are currently trading above 153. The bullish channel which has framed the recovery off early summer lows remains intact for now. This is keeping the focus on continued upside in the near term.
The next topside level to note is the 154.39 resistance. The bigger 157.24 level sits just above that. To the downside, any correction lower will find the 151.40 level as the first support region, ahead of the rising channel low.