Johnson & Johnson (NYSE:JNJ) shares rose in the pre-market Tuesday after the U.S. drug maker raised its quarterly dividend — even as it cut full-year earnings guidance due to the coronavirus outbreak.
J&J raised its dividend from 95 cents a share to $1.01, a 6.3% increase, and it beat Wall Street’s earnings and revenue expectations. On an adjusted basis, J&J reported $2.30 per share during the first three months of the year, higher than the $2 a share expected by analysts.
It generated $20.7 billion in revenue, higher than the $19.47 billion expected.
“The dividend this morning is a real good sign of the strength of the company. We’re in great financial position,” Chief Financial Officer Joseph Wolk told the media shortly after the earnings were released. “We think this could lend itself to some opportunity for us.”
The company lowered its 2020 adjusted earnings forecast to between $7.50 and $7.90 earnings per share, from its prior estimate of between $8.95 and $9.10 a share as the COVID-19 outbreak took a bite out of the company’s performance.
Sales in J&J’s medical device unit fell by 8.2% to $5.9 billion during the quarter as the COVID-19 outbreak forced hospitals to postpone elective
surgeries and Americans stayed homebound.
Wolk said the company was forecasting a 65% to 80% decline in elective procedures during the second quarter.
J&J is the first U.S. drug maker to report earnings post-COVID-19 outbreak, which has infected 1.9 million people worldwide and killed at least 120,449 as of Tuesday morning, according to data compiled by Johns Hopkins University.
Shares hiked $5.12, or 3.7%, to $144.89