J&J slashes outlook, races to develop coronavirus vaccine

Johnson & Johnson, anticipating significant impact from the COVID-19 pandemic, slashed its 2020 sales forecast by billions of dollars and cut its profit expectations by about 15%.

It’s one of the first major US corporations to report first-quarter earnings and likely a harbinger of things to come as the outbreak disrupts the global economy.

The world’s biggest health products maker on Tuesday said it now expects 2020 revenue of $77.5 billion to $80.5 billion, down from its January forecast of $85.4 billion to $86.2 billion. It also forecast adjusted earnings per share of $7.50 to $7.90, down from the January forecast of $9 to $9.15 per share.

Despite that, the company increased its quarterly stock dividend, for the 58th consecutive year, from 95 cents to $1.01 per share.

Investors seemed reassured, driving shares up $7.24, or 5.2%, to $147.01 in morning trading.

J&J faces both the prospect of lower sales as much of the world stays home to avoid infection, and higher costs as the company races to develop a vaccine against the new coronavirus.

“We are committed to beginning production ... imminently and bringing an affordable and accessible vaccine to the public on a not-for-profit basis for emergency pandemic use,” Chief Executive Alex Gorsky said.

On a conference call with analysts, executives said they expect the worst impact this quarter, with recovery starting toward year-end.

The company is aiming to have its single-dose vaccine candidate available for broad use early in 2021, and also is testing two backup vaccine candidates. J&J has a good track record on vaccines, developing ones for HIV, Ebola and the Zika virus over the last decade. (AP)