With the whole market celebrating the double-digit gains pushing the Dow closer to 20,000, Johnson & Johnson (NYSE: JNJ) was one of the few sad faces on the street.
The big drug conglomerate reported earnings before the market opened today and analysts were not impressed, to say the least. While J&J managed to beat estimates of $1.56 earnings per share, it didn’t manage to score the $18.26 billion in revenue that was expected, coming up short at $18.11.
CFO Dominic Caruso tried to put a positive spin on the situation.
“We thought our earnings were very strong for the year and we are very pleased with the results. We grew our top line at an accelerated rate vs. the prior year, we had very strong EPS growth of about 8.5%, and we delivered very strong total shareholder return for 2016, in excess of 15%.”
Furthermore, Caruso noted, the strong dollar had to be taken into consideration.
“If you look at consensus estimates, we noticed that not many of the analysts that follow us have updated their projections for 2016 based on the recent currency movement. We are reporting based on real currency movements. We think that is the only area of any significant difference between our results and expectations.”
Of course, the other thing that brought J&J shares sliding down was the company’s forecast for 2017. But Caruso said that the dollar was a factor, there, as well. Johnson & Johnson, he said, has adjusted its models according to the current exchange rates.
“Not all of the investment community has done that,” he noted. “We think that is really the only difference between our expectations and theirs.”