J&J originally proposed a $8.9bn settlement to resolve its ongoing talc litigation woes, and its subsidiary LTL Management has refiled for Chapter 11 bankruptcy
J&J will end all global sales of its talc-based baby powder by the end of 2023
Net earnings plummeted by over 100% to a loss of $68m during the period, down from the profits of $5.1bn it recorded in 2022.
Shares in the company also dropped by over 2.87% in early trading following the financial update.
The charge comes after J&J’s subsidiary LTL Management refiled for Chapter 11 bankruptcy in April to resolve the healthcare giant’s talc litigation woes.
Further to this, J&J also agreed to contribute up to US$8.9bn, payable over 25 years, to resolve all the current and future talc claims.
It secured commitments from over 60,000 current claimants to support a global resolution on these terms.
Despite the significant blow to its earnings, J&J said it remains confident on its outlook for the remainder of the year.
Sales increased by 5.6% to $2.47bn in Q1, which was supported by an uplift in sales across its pharmaceutical and consumer health arms.
“Our first quarter results demonstrate strong performance across all three segments of our business and reflect the dedication of Johnson & Johnson colleagues around the world,” said Joaquin Duato, board Chairman and CEO.
“With this momentum, I look forward to the remainder of the year, one filled with exciting catalysts that will create both near- and long-term value for patients and all of our stakeholders.”
J&J has been embroiled in an ongoing scandal claiming that its cosmetic talc contained asbestos and caused ovarian cancer and mesothelioma.
But this all came to a head in August 2022 when J&J decided to end all global sales of its talc-based baby powder, marking the end of a 100 year era for its most iconic product.
The personal care goliath has now transitioned to an all cornstarch-based baby powder portfolio instead, following an assessment of its worldwide product range.