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JNJ or PFE: Who has a Stronger Revenue Guidance for Fiscal 2019?

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Apr. 22 2019, Published 7:12 a.m. ET

Revenue guidance for fiscal 2019

In its first-quarter earnings press release, Johnson & Johnson (JNJ) has raised the guidance for its adjusted operational sales growth rate for fiscal 2019 from previously projected 2.0% – 3.0% to 2.5% – 3.5%. The company has also raised its fiscal 2019 operational sales guidance from $81.6 billion – $82.4 billion to $82.0 billion – $82.8 billion. This is reflective of change in YoY operational sales growth from the previous guidance of 0.0% – 1.0% to 0.5% – 1.5%.

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However, despite the hike in guidance for fiscal 2019 operational sales, the company has not changed its fiscal 2019 reported sales guidance of $80.4 billion – $81.2 billion, which implies a YoY decline of 1.5% – 0.5%. According to Johnson & Johnson’s first quarter earnings conference call, this is attributable to the increase in estimates for the negative impact of foreign currency fluctuations in fiscal 2019. The company is considering the euro spot rate of $1.12, lower than the $1.14 considered in January 2019.

In its first quarter earnings conference call, Johnson & Johnson has raised its guidance at the midpoint for other income by $400 million to $2.4 billion – $2.7 billion, which includes impact of the divestiture of Advanced Sterilization Products business.

On the other hand, in its fourth quarter earnings conference call, Pfizer (PFE) has guided for fiscal 2019 revenues of $52.0 billion – $54 billion, assuming $2.6 billion worth negative impact due to generic erosion and $900 million negative impact of FX movements.

Wall Street’s projections

Wall Street analysts have projected Johnson & Johnson’s revenues to be $81.17 billion, $84.60 billion, and $88.49 billion, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively. This implies a YoY change of -0.51%, 4.23%, and 4.60%, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

On the other hand, Pfizer’s revenues are forecasted to change YoY by -0.79% to $53.22 billion in fiscal 2019, 1.95% to $54.26 billion in fiscal 2020, and 4.05% to $56.49 billion in fiscal 2021.

Johnson & Johnson is expected to report higher absolute revenues as well as lower YoY revenue decline as compared to Pfizer in fiscal 2019.

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