Johnson & Johnson will repurchase $5 billion of its common stock days after losing $25 billion in market value following a Reuters report alleging the healthcare giant was aware that its baby powder products contained asbestos.
Chairman and CEO Alex Gorsky said in a Dec. 17 press release that the repurchase underscored the company's confidence in its performance and that the buyback would return value to its shareholders. The New Brunswick, N.J.-based company had about 2.7 billion outstanding shares of common stock as of Sept. 30, according to the press release.
The company is also reaffirming its full-year 2018 sales and adjusted earnings guidance of $81 billion to $81.4 billion, and $8.13 to $8.18 a share, respectively.
Reuters reported Dec. 14 that Johnson & Johnson was aware that its talc power contained carcinogens as early as the 1950s. The report said that the company had eluded regulation from the U.S. Food and Drug Administration since the 1970s and continued to market the powder despite knowing the risks.
Johnson & Johnson called the report "one-sided, false and inflammatory." Gorsky responded further in a video posted to the company's website Dec. 17, asserting that thousands of experts and tests have affirmed the safety of its products.
"We know that our talc is safe," Gorsky said. "If we believed our products were unsafe, they would be off the shelves and out of the market immediately."