What's going on?

Investors weren’t left feeling particularly fresh on Wednesday after global healthcare and consumer products giant Johnson & Johnson (J&J) Suda-fed them fourth-quarter sales that fell short of expectations.

What does this mean?

J&J�s global sales across 2019 ended essentially flat on the year before. While pharmaceuticals revenue climbed almost 4%, this was largely offset by a similar decline in medical device sales. Even J&J�s large consumer business � featuring brands such as Neutrogena beauty products and Tylenol painkillers � couldn�t save the day: sales of those products barely budged last year compared to 2018.


The company seems more optimistic about this year, telling investors it expects 4-5% sales growth in 2020 despite the increasing threat posed by generic unbranded drugs to its pharmaceutical business, which represents half of total revenue. But there�s another catch: that sales growth depends on J&J�s current legal headaches getting resolved favorably. Time for a Tylenol, perhaps?

Why should I care?

For you personally: Defensive pass interference.�

Investors are attracted to the �defensive� qualities of companies like J&J: even if the economy heads south, sales of their essential products should stay resilient. But the world�s largest healthcare company is currently working on a defensive play of its own: J&J is facing thousands of lawsuits covering everything from potentially carcinogenic talcum powder to potentially carcinogenic Tylenol. On second thoughts…

Zooming out: Abbott and beyond.�

While J&J�s share price fell on Wednesday, healthcare investors did have one reason to rejoice: fellow US pharmaceutical and medical device giant Abbott Labs saw its stock rise after the company reported quarterly sales ahead of investors’ expectations, and forecast continuing momentum this year. Investors liked the sound of that, and may also be drooling over the company�s potential to provide them with income of their own: Abbott increased its dividend last month by 12.5%, marking the 48th consecutive year of dividend growth.