01—Abstract
Summary
Summary of the 10-K filed February 20, 2019. Cited figures are marked; the original filing is the authoritative source.
Johnson & Johnson's (JNJ) 2018 10-K filing reveals a solid financial performance driven by strong growth in its Pharmaceutical segment, which benefited from key product launches and expanded indications.
The Medical Devices segment showed modest growth, while the Consumer segment experienced a slight increase, impacted by divestitures and brand performance. The company's overall sales increased by 6.7% to $81.6 billiona, with pharmaceuticals being the primary growth engine. JNJ continued its commitment to innovation, investing heavily in research and development across all segments.
The company also actively managed its portfolio through strategic acquisitions and divestitures, including the significant acquisition of Actelion Ltd. in the pharmaceutical segment and the divestiture of its LifeScan diabetes care business. Despite facing ongoing litigation and regulatory scrutiny, particularly in product liability, JNJ maintained effective internal controls and demonstrated a strong commitment to shareholder returns through consistent dividend payments and share repurchases.
02—Key points
Key Highlights
- Total sales reached $81.6 billion, a 6.7% increase year-over-year, driven by robust performance in the Pharmaceutical segment.
- The Pharmaceutical segment grew by 12.4%, with significant contributions from Immunology (driven by STELARA® and TREMFYA®) and Oncology (driven by DARZALEX® and IMBRUVICA®).
- The Medical Devices segment reported a 1.5% increase in sales, with growth in Surgery and Vision, partially offset by declines in Orthopaedics and Diabetes Care (due to divestiture).
- The Consumer segment saw a 1.8% increase in sales, with Beauty and OTC franchises showing strength, while Baby Care experienced a decline.
- Johnson & Johnson invested $10.8 billion in research and development, underscoring its commitment to innovation and pipeline advancement.
- The company completed significant portfolio management activities, including the acquisition of Actelion Ltd. and the divestiture of the LifeScan diabetes care business.
- JNJ repurchased $5.9 billion of its common stock during the year and increased its dividend for the 56th consecutive year.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 20, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $81.58B$76.45B | +6.7% |
| Cost of Revenue | $27.09B$25.44B | +6.5% |
| Gross Profit | $54.49B$51.01B | +6.8% |
| SG&A Expenses | $22.54B$21.52B | +4.7% |
| Interest Expense | $1.00B$934.00M | +7.6% |
| Net Income | $15.30B$1.30B | +1076.7% |
| EPS (Basic) | $5.70$0.48 | +1087.5% |
| EPS (Diluted) | $5.61$0.47 | +1093.6% |
| Shares Outstanding (Basic) | 2.68B2.69B | −0.4% |
| Shares Outstanding (Diluted) | 2.73B2.75B | −0.6% |
05—Questions
Frequently Asked Questions
What was Johnson & Johnson's overall sales performance in 2018?
Johnson & Johnson reported total sales of $81.6 billion in 2018, an increase of 6.7% compared to the prior year. This growth was driven by strong operational performance across its business segments, particularly the Pharmaceutical segment.
Which segment contributed most significantly to Johnson & Johnson's sales growth?
The Pharmaceutical segment was the primary driver of sales growth, with an increase of 12.4% to $40.7 billion. This growth was fueled by key products in Immunology and Oncology, as well as contributions from recent acquisitions.
What were the major events related to portfolio management in 2018?
Johnson & Johnson actively managed its portfolio by completing the significant acquisition of Actelion Ltd. in the Pharmaceutical segment and divesting its LifeScan diabetes care business. These strategic moves aim to optimize the company's business mix and focus on high-growth areas.
What is the company's outlook on R&D investment?
Johnson & Johnson maintained a strong commitment to innovation, investing $10.8 billion in research and development during 2018. This investment reflects the company's strategy to drive future growth through the development of new products and therapies across its healthcare segments.
06—Continue