Johnson & Johnson Vision produces disappointing results

Inventory issues affect the Jacksonville-based division of medical products giant.


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  • | 12:00 a.m. July 25, 2024
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Tim Schmid, worldwide chairman of Johnson & Johnson’s MedTech division.
Tim Schmid, worldwide chairman of Johnson & Johnson’s MedTech division.
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Johnson & Johnson reported disappointing second-quarter results for its Jacksonville-based vision products unit, as inventory issues that began early this year persisted.

Johnson & Johnson Vision reported sales of $1.285 billion in the quarter, up 0.8% excluding foreign exchange impacts. 

Sales in the U.S. dropped 1.2% to $523 million.

Johnson & Johnson Vision makes contact lenses under the Acuvue brand at its Jacksonville headquarters and at a second manufacturing facility in Ireland, and makes eye care surgical products in other plants.

In the New Jersey-based parent company’s July 17 conference call with analysts, Tim Schmid, worldwide chairman of Johnson & Johnson’s MedTech division, said the contact lens business continued to be impacted by inventory issues.

“We initially announced in the first quarter some challenges with distributor stocking dynamics here in the U.S., some competitive pressures, as well as some macroeconomic challenges in Japan,” Schmid said.

However, he said the stocking issues are easing.

“What gives me confidence in the turnaround of that business is that we actually saw sequential improvement through the second quarter,” he said.

“Some of those stocking dynamics I mentioned bled into April but month on month, we saw a strong rebound of that business, in fact, to the end of the quarter, back to historical levels.”

Schmid said he is encouraged by the sales potential of new Acuvue products and an intraocular lens, an artificial lens implanted to replace the eye’s natural lens in cataract surgery.

“So as we look to the back half of the year, while it’s been a slower start there, we’re very confident that we’re going to be able to bring that business back to historical norms, driven primarily by innovation,” he said.

Schmid said Johnson & Johnson’s MedTech business, which includes cardiovascular and orthopedic products, also was affected by volatility in its China markets.

Total MedTech sales rose 4.3%, below its target growth rate of 5% to 7%, Chief Financial Officer Joseph Wolk said.

Wolk projected full-year sales growth of 6% in that business as activity picks up in the second half of the year.

“To me, this reflects the power and breadth of our company, where we can more than offset quarterly volatility in one part with overperformance from another part of our business,” he said.

Johnson & Johnson reported total adjusted sales growth of 6.5% to $22.4 billion in the second quarter, with adjusted earnings rising by 26 cents a share to $2.82.

Magazine: 10 private Jacksonville firms top $1B in revenue

Florida Trend magazine’s annual list of largest private companies in the state shows 10 Jacksonville-based companies exceeding $1 billion in 2023 revenue, but the top two need an asterisk.

The list in the magazine’s July issue put Florida Blue as the fifth-largest private company in Florida and largest in Jacksonville with $24 billion in revenue.

However, as Florida Trend said in a footnote, Florida Blue is a subsidiary of GuideWell Mutual Holding Corp., which had a total of $30 billion in revenue.

It did not say why Jacksonville-based GuideWell was not included in the list.

The list also includes Fanatics Inc. as a Jacksonville-based company, ranked 10th in the state with $8 billion in revenue. However, Fanatics is not headquartered in Jacksonville.

The company was founded in Northeast Florida and still maintains its commerce headquarters in Jacksonville, but its corporate headquarters office is in New York.

The other eight Jacksonville-based private companies exceeding $1 billion in revenue, according to Florida Trend, were Crowley Maritime ($2.8 billion), Acosta ($2.1 billion) Haskell ($1.9 billion), Main Street America Insurance ($1.8 billion), Gate Petroleum ($1.6 billion), Summit Contracting Group ($1.6 billion), Newfold Digital ($1.5 billion) and Brightway Insurance ($1.2 billion).

Cadre Holdings hit by cyberattack

Cadre Holdings Inc. disclosed in a Securities and Exchange Commission filing that an unauthorized third party gained access to certain technology systems in a July 15 cyberattack.

Jacksonville-based Cadre, which makes safety and security products for first responders, said it initiated its standard response protocols after detecting the breach with its security tools.

“The Company is in the early stages of its investigation and assessment of this incident, and therefore the full scope, nature and impact of the incident has not yet been determined,” the filing said.

“Although certain of the Company’s operations have been affected, the Company is unable to determine at this time whether the incident has had or is reasonably likely to have a material impact on the Company’s financial condition or results of operations.”

Before Cadre’s disclosure, the most recent cyberattack on a Jacksonville-based public company came at Fidelity National Financial Inc. in November 2023.

The title insurance company said the attack affected about 1.3 million consumers.

Fidelity’s fourth quarter earnings report included a $10 million cost from the incident. Fidelity is a much larger company than Cadre, with $11.75 billion in revenue and $1.34 billion in adjusted pretax earnings in 2023.

Cadre had revenue of $482.5 million and pretax income of $52.9 million last year.

Analyst downgrades FIS after stock gains

Morgan Stanley analyst James Faucette downgraded Jacksonville-based Fidelity National Information Services Inc., or FIS, from “overweight” to “equal weight,” saying the “story has played out” in a July 22 research note.

“With the stock near our price target we are downgrading FIS as most of the expected price upside related to better Banking growth, cost actions, management communication, and Worldpay sale have been priced in,” he said.

FIS, which was spun off from Fidelity National Financial in 2006, sold off its majority stake in payments processing company Worldpay in February and is focusing more on its core banking technology business.

The stock was one of the top performers among Jacksonville companies in the first half of the year, rising 25% to $75.36 by June 30.

Those gains brought FIS close to Faucette’s price target of $79, prompting the downgrade.

“We think the current valuation of about 14 times (earnings) adequately reflects FIS earnings potential going forward,” he said.

Pinnacle Bank opens first branches in Jacksonville

Nashville-based Pinnacle Financial Partners Inc. highlighted its activity in Jacksonville in its quarterly earnings report as its bank opened its first two branches in the market.

Pinnacle Bank opened branches at 501 Riverside Ave. in Jacksonville and 100 Corridor Road in Ponte Vedra Beach in May, according to the Federal Deposit Insurance Corp. database.

Pinnacle announced its plans in January to enter the Northeast Florida market. The company’s website shows the company operates in 18 markets in eight Southeastern states and in its second quarter report, CEO M. Terry Turner said Pinnacle is growing strongly in new markets.

“Loan growth attributable to these new markets for the first half of 2024 amounted to approximately 73% of our aggregate loan growth this year,” Turner said in a July 16 news release.

“Our latest expansion into Jacksonville is also advancing rapidly in terms of hiring revenue producers and moving client relationships, with that market reporting $20.1 million in loans, $28.8 million in deposits and $614.6 million in wealth management assets, all amassed within just the last three months.”

Turner said the company has hired 89 “revenue producers” so far this year, including 1r8 in Jacksonville.

Pinnacle hired a team of former Truist Financial Corp. bankers led by Scott Keith and Debbie Buckland to run its Northeast Florida operations.

The team moved into temporary offices at 501 Riverside Ave. but is building out a permanent office on the first floor of that building.

The city issued a building permit July 10 for Pinnacle at a project cost of almost $1.02 million for the Riverside office.

Pinnacle, with $48.5 billion in assets, reported 135 offices at the end of the second quarter.

Report: JinkoSolar and other Chinese firms dominate solar manufacturing

A July 17 report by Reuters news service said U.S. officials are concerned about a surge in construction of solar manufacturing plants by Chinese companies, including JinkoSolar Holding Co. Ltd.

JinkoSolar opened its first U.S. plant at AllianceFlorida at Cecil Commerce Center on Jacksonville’s Westside in 2018.

Reuters said Chinese companies have advantages from government support for its solar industry, and its analysis shows their U.S. plants will have enough capacity to serve half of the U.S. solar market next year.

That could be a problem for President Joe Biden’s climate agenda.

“While his administration is keen for new investment that creates U.S. jobs in clean energy, his government is also desperate to prevent over-reliance on geopolitical rival China as the economy transitions from oil and gas to renewables,” Reuters said.

JinkoSolar’s Jacksonville plant was searched by U.S. officials in May 2023.

“Our production plant promptly resumed production following the search and its normal operations and production were not negatively affected. As of the date of this annual report, we have not received any indictments or other documents presenting criminal charges against us,” JinkoSolar said in its annual report filed April 25.

JinkoSolar’s website says it employs more than 300 people at its Jacksonville plant, but a company spokeswoman told the Daily Record in May it employed about 550 and expected to reach 600 by the end of that month.

The annual report said JinkoSolar had 14 global production facilities and 57,397 employees, with the majority in China.

 

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