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Late yesterday, Johnson & Johnson (NYSE: JNJ) announced that it will eliminate roughly 900 jobs -- mainly from the company's Ortho-McNeil-Janssen Pharmaceuticals unit.
The move includes a mix of attrition along with hiring freezes, all of which are part of JNJ's plans to cut its U.S. sales force and try to refocus its market approach. These job cuts total roughly 6% of JNJ's entire pharmaceutical sales force.
Back in January, the Dow conglomerate predicted weaker 2009 results -- thanks to the current recession, unfavorable currency exchange rates, and increased competition from generic drug makers.
Technically, shares of JNJ are rebounding off of support in the $50 region -- but they continue to face overhead pressure from their 10- and 20-month moving averages. These trendlines have pushed the Dow component lower since late 2008 and maintain their potential resistive placement. Can this news help push the shares higher? Yesterday the stock finished lower, but this news could act as a boost for the equity (who knows in this current market, right?).
With the company reporting earnings next week, we could see a flurry of option activity along with price fluctuations throughout today and on Monday (the report is set for Tuesday, April 14). The firm's estimated earnings are $1.24, if JNJ misses this number by a great deal, we could see the shares challenge the support at $50.
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