Johnson & Johnson
) is slated to report its third quarter 2012 earnings on October
16, 2012 before the opening bell. The current Zacks Consensus
Estimate for the second quarter is $1.20 per share, representing a
year-over-year decline of 3.0%. Third quarter revenues are expected
to come in at $16.9 billion, representing year-over-year growth of
5.3%. Full year earnings are expected to be $5.06 per share, up
Johnson & Johnson has surpassed earnings estimates in each
of the last four quarters with a trailing four-quarter average of
1.68%. Third quarter earnings could exceed estimates by 1.67%.
Second Quarter Recap
Johnson & Johnson posted second quarter 2012 earnings
(excluding special items) of $1.30 per share, a penny above the
Zacks Consensus Estimate and 1.6% above the year-ago earnings of
$1.28 per share. Results were impacted by negative currency
Revenue declined 0.7% year-over-year to $16.5 billion. Revenues
were just shy of the Zacks Consensus Estimate of $16.7 billion.
While operational factors favorably impacted sales by 3.5%,
currency fluctuations had a negative impact of 4.2%. Results
included the impact of the recently completed Synthes acquisition,
which contributed 1.2% to global operational sales growth
Including one-time items, Johnson & Johnson reported second
quarter earnings of 50 cents per share, 50.0% below the year-ago
earnings of $1.00.
Agreement of Analysts
Estimate revisions for Johnson & Johnson for the third
quarter and full year 2012 are mixed. While 2 of the 14 analysts
covering the stock have reduced their third quarter estimates in
the last 7 days, 3 analysts have reduced their estimates over the
last 30 days. There were no movements in the opposite direction.
Meanwhile, estimates for the full year have been revised upwards
during the last 7 and 30 days by 2 analysts each with no movements
in the opposite direction.
Magnitude of Estimate Revisions
The Zacks Consensus Estimate for the third quarter has declined
by a penny to $1.20 per share over the last 7 days. Meanwhile, the
Zacks Consensus Estimate for 2012 remains unchanged at $5.06 per
share. The Zacks Consensus Estimate for 2012 is towards the higher
end of the company's earnings per share guidance range of $5.00 -
Neutral on Johnson & Johnson
We currently have a Neutral recommendation on Johnson &
Johnson. The stock carries a Zacks #2 Rank (Buy rating) 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
Besides Johnson & Johnson,
), will also be reporting its financial results (second quarter
fiscal 2013) on October 16.
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