Johnson & Johnson
) is slated to report its fourth quarter and full year 2011
earnings on January 24, 2012 before the opening bell. The current
Zacks Consensus Estimate for the fourth quarter is $1.10 per share,
representing a year-over-year increase of 6.36%. Full year earnings
are expected to be $4.97 per share, up 4.4%.
Johnson & Johnson has surpassed earnings estimates in three
of the last four quarters and reported in line with the Zacks
Consensus Estimate in the final quarter of 2010 (with a trailing
four-quarter average of 4.57%).
Third Quarter Recap
Johnson & Johnson posted third-quarter 2011 earnings
(excluding special items) of $1.24 per share, three cents above the
Zacks Consensus Estimate of $1.21 and 0.8% above the year-ago
earnings of $1.23. Revenues for the reported quarter increased 6.8%
year-over-year to $16 billion. Revenues were in-line with the Zacks
Operational factors and foreign exchange movement favorably
impacted sales by 2.6% and 4.2%, respectively.
(Read our full coverage of the third quarter 2011 earnings
J&J Beats, Adjusts Outlook
Agreement of Analysts
There is a significant negative bias in estimate revisions for
Johnson & Johnson for the fourth quarter as well as fiscal
2011. Fourth quarter estimates have been revised downward over the
last 7 and 30 days by 3 analysts each with no corresponding upward
Full year 2011 estimates too have a downward bias, with 3 of the
24 analysts following the stock slashing estimates over the past 7
and 30 days. No upward movement has been witnessed.
The downward revisions mainly reflect the impact of foreign
exchange headwinds and manufacturing issues.
Magnitude of Estimate Revisions
There is a negligible change in estimates for the fourth quarter
and full year 2011 in the last 7 and 30 days. The Zacks Consensus
2011 Estimate of $4.97 is within the guidance range provided by the
company. Johnson & Johnson expects 2011 earnings in the range
of $4.95 - $5.00 per share.
Neutral on Johnson & Johnson
We currently have a Neutral recommendation on Johnson &
Johnson. The stock carries a Zacks #4 Rank (Sell recommendation) in
the short run. Our long-term Neutral recommendation on the stock is
based on the belief that Johnson and Johnson's diversified business
model, lack of cyclicality and strong financial position will help
it in tough situations. Moreover, Johnson & Johnson has been
signing deals, which should help boost its revenues in the long
JOHNSON & JOHNS (
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