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What Are Johnson & Johnson’s Revenue Forecasts for Fiscal 2019?

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Jan. 30 2019, Published 12:43 p.m. ET

Revenue projections for fiscal 2019

In its fourth-quarter earnings investor presentation, Johnson & Johnson (JNJ) projected its operational sales to fall in the range of $81.6 billion to $82.4 billion in fiscal 2019, which would imply a YoY rise of 0.0% to 1.0%.

Wall Street analysts expect Johnson & Johnson to report revenues of $81.10 billion in fiscal 2019, a YoY drop of 0.59%. The company is expected to report revenues of $84.90 billion in fiscal 2020, a YoY rise of 4.69%. Johnson & Johnson is also expected to report revenues of $88.71 billion in fiscal 2021, a YoY rise of 4.48%.

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Adjusted sales and reported sales guidance

According to the company’s fourth-quarter earnings investor presentation, Johnson & Johnson is assuming a favorable YoY revenue impact of $4.6 billion to $6.0 billion, or 5.7% to 7.3%, attributable to organic growth for fiscal 2019. However, according to Johnson & Johnson’s fourth-quarter earnings conference call, the impact of this positive driver is expected to be partly offset by revenue erosion due to generic competition for products such as Zytiga, Velcade, and Tracleer in the US market and biosimilar competition for Procrit and Remicade. The loss of exclusivity (or LOE) of these key assets is thus expected to result in a YoY negative revenue impact of $3.0 billion to $3.5 billion or 3.7% to 4.3% in fiscal 2019.

Incorporating these assumptions, Johnson & Johnson has forecasted its adjusted sales for fiscal 2019 to fall in the range of $83.2 billion to $84.0 billion. This estimate implies a YoY revenue growth rate of 2.0% to 3.0% for fiscal 2019. The adjusted sales estimate, however, doesn’t include the projected negative YoY revenue impact of $1.6 billion, or 2%, attributable to the company’s acquisitions or divestitures in fiscal 2019.

According to the company’s fourth-quarter earnings investor presentation, Johnson & Johnson has projected its reported sales for fiscal 2019 to fall in the range of $80.4 billion to $81.2 billion. This estimate implies a YoY revenue decline of 1.5% to 0.5% for fiscal 2019. In addition to assumptions about organic growth, the impact of LOE and acquisitions and divestitures, the reported sales estimate incorporates a projected YoY revenue impact of -$1.2 billion, or 1.5%, attributable to the foreign currency fluctuations. According to Johnson & Johnson’s fourth-quarter earnings conference call, the company has assumed the euro to U.S. dollar rate of $1.14 for modeling the foreign exchange impact for fiscal 2019.

In the next article, we will discuss Johnson & Johnson’s EPS projections for fiscal 2019 in greater detail.

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