BUZZ - Medical device manufacturers' stocks fall, impacted by Johnson & Johnson's medical technology business missing expectations

October 13 - ** Johnson & Johnson (JNJ.N) reported that its MedTech division’s third-quarter sales (link) fell short of expectations, with sales outside the United States remaining almost flat. As a result, major medical device manufacturers also saw their share prices decline.

** Abbott Laboratories ABT.N, Boston Scientific BSX.N, Medtronic MDT.N, Intuitive Surgical ISRG.O, Stryker SYK.N, and Zimmer Biomet ZBH.N all saw share prices drop by 1% to 4%.

** Johnson & Johnson (J&J) shares fell 4.7% to $251.33 after its MedTech sales grew 2.5% to $8.6 billion, missing analysts’ estimates of $8.71 billion — according to data compiled by LSEG.

** Johnson & Johnson CFO Joe Wolk said that Middle East conflicts, tightening measures in Europe, and pricing issues in the Chinese market put pressure on international results, “but the impact may be somewhat more pronounced.”

** “The main concern for investors remains the underperformance of the MedTech business (especially outside the U.S.), which management (JNJ) also acknowledged on the conference call,” said RBC Capital Markets.

** “If the adverse impact of volume-based procurement (VBP) extends to Medtronic’s surgical business, or even to Intuitive Surgical, we would not be surprised,” JPMorgan analysts said, referring to China’s volume-based procurement pricing program.

** However, JPMorgan added, “It is difficult to broadly apply Johnson & Johnson’s results to other companies in the sector.”

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