J&J Revises Guidance After Kenvue Spinout. There’s Good News on the Dividend.

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Johnson and Johnson

On Wednesday, after spinning off the consumer-health company, it issued new financial guidance

Kenvu
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While its revenue and sales forecasts have been downgraded, the company expects to maintain its dividend and grow earnings quickly.

Johnson and Johnson

(Symbol: JNJ) is poised to earn from current earnings.

Kenvu

(KVUE) However, that was offset by a lower stock count in calculating earnings per share, as investors eagerly took the exchange offer to convert J&J shares into Kenvu.

The drugmaker now expects full-year reported sales of $83.2 billion to hit $84 billion, down from its previous forecast of $98.8 billion to $99.8 billion. The new figure shows sales growth of 7 to 8%, up from 6.5% to 7.5% previously.

The company now expects adjusted earnings of $10 to $10.10, representing growth of 12 percent to 13 percent. That compares with an estimate of $10.70 to $10.80, which was a 5.5% to 6.5% increase.

Johnson & Johnson maintained its quarterly earnings forecast of $1.19 a share. At the stock’s Tuesday closing price of $164.31, this implies an annual dividend yield of 2.9 percent.

Kenvu is set to join Johnson & Johnson on the S&P 500 Dividend Aristocrats Index.

S&P 500
Companies that have increased their dividends for at least 25 consecutive years.

“The completion of this transaction positions Johnson & Johnson as a pharmaceutical and medtech company focused on providing patients with flexible healthcare solutions,” said CEO Joaquin Duato.

Johnson & Johnson shares were up 0.2 percent at $164.70.

Write to Adam Clark at [email protected]