(Reuters) -Johnson & Johnson on Tuesday beat Wall Street estimates for quarterly revenue and profit on strong demand for its cancer drug Darzalex while projecting an easing of supply-chain pressures next year on its consumer unit.
The U.S. health conglomerate, which also sells medical devices and consumer health products such as Band Aid bandages and painkiller Tylenol, tightened its full-year adjusted profit forecast range. Its shares rose 1.5% to $169.01 in premarket trading.
J&J has raised prices at its consumer health unit, which it expects to spin off in mid-to-late 2023, in response to surging inflation. On Tuesday, the company signaled that supply-chain pressures that pushed up costs at the unit were expected to ease next year.
“I would say that while no business, no industry is entirely immune to a recession, I think healthcare is much more resilient than most,” Chief Financial Officer Joseph Wolk told Reuters in an interview.
The company expects some impact of inflation to ease next year but warned higher costs of inventory manufactured in 2022 could weigh on 2023 profit.
A stronger dollar will hit 2023 adjusted earnings by between 40 cents and 45 cents, the company said.
Sales at pharmaceuticals, the company’s largest unit, rose 2.6% to $13.21 billion in the third quarter. That beat estimates of $13.03 billion, according to six analysts polled by Refinitiv.
Sales of cancer drug Darzalex jumped 29.8% to $2.05 billion.
The medical devices unit reported a 2.1% rise in sales to $6.78 billion on demand for contact lenses and wound-closure products.
The results from J&J, the first drugmaker and medical devices firm to report third-quarter earnings, pushed up shares of rival medical device makers such as Edwards Lifesciences and Medtronic between 1% and 2%.
“It’s all about the product and Johnson & Johnson has some real headline grabbers that have helped it navigate recent choppy waters,” said Danni Hewson, financial analyst at AJ Bell.
J&J said total sales rose 1.9% to $23.79 billion in the third quarter, topping estimates of $23.34 billion, according to Refinitiv IBES data.
Excluding items, J&J earned $2.55 per share, beating estimates of $2.47.
(Reporting by Manas Mishra, Raghav Mahobe and Bansari Mayur Kamdar in Bengaluru and Michael Erman in New York; Editing by Sriraj Kalluvila)