Hot Stocks: JNJ, MMM fall on legal decision; GEHC rises on earnings; PHG climbs

A legal decision with wide implications for corporate decision-making stirred trading in Monday’s midday action. Johnson & Johnson (NYSE:JNJ) fell following an appeals court ruling related to its talc personal injury lawsuits. 3M (MMM) slipped in sympathy, as the company has used a similar legal strategy in a separate case.

Elsewhere, earnings news remained a notable driver. The release of quarterly results sent GE HealthCare Technologies (GEHC) higher. At the same time, Philips (PHG) advanced following its quarterly update and the announcement of a restructuring program.

Decliners

Johnson & Johnson (JNJ) lost ground in midday trading after an unfavorable decision in an appeal of a series of cases stemming from charges that the firm’s talc-based baby powder caused cancer. Shares dipped 3% on the news.

The appeals court ruled that JNJ can’t use bankruptcy to shield itself from the talc lawsuits. The company had created a subsidiary to hold the talc liabilities and filed for bankruptcy for the unit. This followed 38K personal injury cases related to talc.

The ruling in the JNJ case also put pressure on 3M (MMM). The manufacturing conglomerate has used a similar bankruptcy strategy to shield itself from lawsuits related to faulty earplugs. MMM dipped more than 1% in intraday action.

Gainers

GE HealthCare Technologies (GEHC) rose almost 4% in midday action, bolstered by the release of its quarterly results. The recent spinoff from GE reported slight declines in Q4 net income and EPS. However, adjusted EBIT climbed to $844M compared to $827M in the same period last year.

GEHC reported revenue that climbed 7% to $4.93B. Looking ahead, the firm projected adjusted EPS for 2023 of $3.60-$3.75, with organic revenue predicted to rise 5% to 7%.

Philips (PHG) rose in intraday action as well, driven higher by quarterly results and news of a restructuring program. Even with challenging supply chain conditions, the company reported quarterly comparable sales that expanded compared to last year. However, adjusted income from continuing operations attributable to shareholders fell 28% year over year.

Separately, the company announced that it was cutting 6K jobs worldwide. It plans on 3K reductions coming in 2023, with the rest happening by 2025. Shares rose more than 6% in midday trading.

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