Johnson & Johnson (NYSE:JNJ) suspended sales guidance for its COVID-19 vaccine on Tuesday, citing global oversupply and demand uncertainties. The pharmaceutical group also cut its full-year sales and profit forecast. Chief financial officer Joe Wolk said that the forecast cuts only reflected the impact of a stronger dollar. Still, J&J stock rose 3% on Tuesday as investors welcomed an earnings beat and a dividend increase.

Johnson & Johnson Cuts 2022 Forecast

The pharmaceutical group had previously said it was aiming for $3 to $3.5 billion in sales in 2022 for its COVID vaccine, which has performed poorly compared to its competitors due to weak demand in the United States, safety concerns, and manufacturing bottlenecks.

J&J also cut its full-year adjusted earnings forecast to $10.15-10.35 per share from previous targets of $10.40-10.60.

J&J now forecasts sales of $94.8 billion to $95.8 billion in 2022, about $1 billion lower than the previous forecast.

Chief Financial Officer Joe Wolk said during J&J’s earnings call that the company faces economic headwinds from higher input costs and commodity prices, as well as increased costs for labor, energy, and transportation. J&J also faced supply constraints on some products.

Sales and Profit Beat Expectations

J&J reported first-quarter revenue of $23.4 billion, slightly beating Wall Street expectations of $23.6 billion, but up 5% from the same quarter last year. The reported first-quarter adjusted earnings of $2.67 a share also beat estimates of $2.58 and represent an increase of 3.1% from the same period in 2021. J&J reported net income of $5.15 billion, down by almost 17% compared to the first quarter of 2021.

The company has sold $457 million of its COVID vaccine globally. Wolk said on Tuesday that developing countries have limited capacity in terms of refrigeration and gunfire, which has created a backlog of vaccines.

J&J reported pharmaceutical sales of $12.87 billion, an increase of 6.3% over the same quarter last year. The company’s medical device business grew 5.9% to $6.97 billion in sales from the first quarter of 2021. Sales from J&J’s consumer healthcare business, which it is transforming into a separate publicly traded company, fell 1.5% to $3.59 billion.

Dividend Hike

J&J’s board of directors approved a quarterly dividend increase of 6.6% to $1.13 per share due to the company’s strong performance in 2021.