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Johnson & Johnson Third Quarter Earnings Preview
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When Johnson & Johnson (NYSE:JNJ) releases its third quarter earnings on Tuesday, October 16, 2012, analysts are expecting a 2.4% drop in earnings from a year ago. The consensus estimate is $1.21 per share, down from earnings of $1.24 per share a year ago.
Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: How To Decode A Company's Earnings Reports
What to Expect: While down from $1.25 three months ago, the consensus estimate has remained unchanged over the past 30 days. For the fiscal year, analysts are expecting earnings of $5.06 per share.
Johnson & Johnson is expected to beat last year's reported revenue of $16 billion and come in at $16.93 billion for the quarter. For the fiscal year, expected revenue is $67.17 billion.
Company Performance: Revenue has increased 2.4% on average over the past four quarters. The biggest increase was in the third quarter of the last fiscal year, up 6.8% from the year-earlier quarter.
The company has seen steady earnings for the last eight quarters, but income has been dropping year-over-year by an average of 33% over the last four quarters.
JNJ's P/E ratio of 21.7 is above the industry average of 14.53. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?
The stock price has fallen slightly over the past quarter, from $68.61 on July 13, 2012 to its current price, $68.22. Johnson & Johnson's best recent streak was when its price gained $2.44 per share between August 30, 2012 and October 5, 2012.
The Competition: Johnson & Johnson is a holding company involved in the research and development, manufacture and sale of a range of health care products. Analysts are optimistic about Johnson & Johnson, with 14 of 22 assigning it a buy rating. This marks a small improvement, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the biotechnology and drugs industry is Merck (MRK). Analysts are less optimistic about Johnson & Johnson than about Merck. Eleven out of 18 analysts rate the latter a buy.
Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: How To Decode A Company's Earnings Reports
What to Expect: While down from $1.25 three months ago, the consensus estimate has remained unchanged over the past 30 days. For the fiscal year, analysts are expecting earnings of $5.06 per share.
Johnson & Johnson is expected to beat last year's reported revenue of $16 billion and come in at $16.93 billion for the quarter. For the fiscal year, expected revenue is $67.17 billion.
Company Performance: Revenue has increased 2.4% on average over the past four quarters. The biggest increase was in the third quarter of the last fiscal year, up 6.8% from the year-earlier quarter.
The company has seen steady earnings for the last eight quarters, but income has been dropping year-over-year by an average of 33% over the last four quarters.
The stock price has fallen slightly over the past quarter, from $68.61 on July 13, 2012 to its current price, $68.22. Johnson & Johnson's best recent streak was when its price gained $2.44 per share between August 30, 2012 and October 5, 2012.
The Competition: Johnson & Johnson is a holding company involved in the research and development, manufacture and sale of a range of health care products. Analysts are optimistic about Johnson & Johnson, with 14 of 22 assigning it a buy rating. This marks a small improvement, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the biotechnology and drugs industry is Merck (MRK). Analysts are less optimistic about Johnson & Johnson than about Merck. Eleven out of 18 analysts rate the latter a buy.
by
Investopedia Staff
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