Johnson & Johnson’s net earnings dropped 14% in the first-quarter (JNJ)

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Johnson & Johnson shares rose in pre-market trading Tuesday after the company released first-quarter results that beat Wall Street’s expectations for both earnings and revenue.
The pharmaceutical giant’s net earnings and earnings per share, however, dropped 14.2% and 13.1% compared to the same time last year.
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Shares of Johnson & Johnson rose 2% in pre-market trading on Tuesday after the pharmaceutical giant reported first-quarter results that topped analysts’ expectations on both the top- and bottom-lines.

The strong showing comes as the company faces 13,000 lawsuits related to the safety of its signature baby powder and Shower to Shower, a brand the company sold off in 2012.

Here’s what Johnson & Johnson reported compared with what analysts surveyed by Bloomberg were expecting:

Adjusted earnings per share (EPS): $2.10 versus $2.04.
Revenue: $20.02 billion versus $19.61 billion.

Still, J&J’s net earnings of $1.39 a share were down 14.2% compared to the same period last year as the conglomerate recorded litigation expenses of $423 million in the first-quarter. Last year, its net earnings were $1.60 a share.

"We note J&J waited to raise guidance until 2Q18 last year, so today’s guidance raise suggests a higher degree of confidence in the achievability of guidance targets," said Morgan Stanley analyst David Lewis in a note to clients out Tuesday morning.

The company has come under pressure in recent months after a Reuters investigation in mid-December alleged Johnson & Johnson knew for decades without disclosing to regulators or the public that some of its products contained small amounts of asbestos. Johnson & Johnson refuted the report’s findings.

In February, Johnson & Johnson’s shares took a hit when the Securities and Exchange Commission and the Department of Justice subpoenaed the company to produce documents related to the safety of the company’s baby powder and other talc-containing products.

Wall Street is essentially split between bullish and neutral. Of those analysts surveyed by Bloomberg, 11 said "buy," 10 were "neutral," and one suggested "sell."

Johnson & Johnson was up 6% this year. The company’s annual shareholder meeting is set for April 25.

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