01—Abstract
Summary
Summary of the 10-K filed February 16, 2023. Cited figures are marked; the original filing is the authoritative source.
Johnson & Johnson (JNJ) reported strong performance in its 2022 10-K filing, with worldwide sales reaching $94.9 billiona, a 1.3% increase driven primarily by operational volume growth, despite negative currency impacts.
The company operates across three key segments: Pharmaceutical, MedTech, and Consumer Health. The Pharmaceutical segment saw a 1.7%b sales increase, with notable growth in Oncology and Immunology, though offset by declines in Infectious Diseases and Neuroscience. The MedTech segment grew 1.4%, bolstered by strong performance in Interventional Solutions and Vision, though Orthopaedics remained flat operationally.
The Consumer Health segment experienced a slight decrease of 0.5%, impacted by supply constraints in Skin Health/Beauty and category declines in Oral Care. Significant investments in R&D, totaling $14.6 billionc, underscore the company's commitment to innovation. JNJ's financial health remains robust, with operating cash flow of $21.2 billion.
The company is also actively managing its capital structure, including a $5.0 billiond share repurchase program and a net debt position of $16.1 billion, largely due to the acquisition of Abiomed. Investors should note the ongoing legal proceedings, particularly those related to talc and opioids, which have ongoing financial implications and reserves. The planned separation of the Consumer Health business into a new publicly traded company (Kenvue) is a significant strategic initiative expected in 2023.
02—Key points
Key Highlights
- Worldwide sales reached $94.9 billion in 2022, a 1.3% increase driven by operational volume, partially offset by unfavorable currency movements.
- The Pharmaceutical segment achieved sales of $52.6 billion, up 1.7%, with Oncology and Immunology showing strong growth, while Infectious Diseases and Neuroscience experienced declines.
- The MedTech segment reported sales of $27.4 billion, up 1.4%, driven by Interventional Solutions and Vision, with Orthopaedics remaining flat.
- Consumer Health segment sales were $15.0 billion, down 0.5%, impacted by supply chain constraints and competitive pressures.
- Research and development expenses totaled $14.6 billion, reflecting continued investment in innovation across all segments.
- The company has a pending separation of its Consumer Health business, Kenvue, expected in 2023.
- Net earnings were $17.9 billion, with diluted earnings per share of $6.73.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Johnson & Johnson kept $0.41.
- Revenue$85.16B100.0%
- Cost of revenue−$26.55B31.2%
- Gross profit$58.61B68.8%
- Operating costs−$45.28B53.2%
- Operating income$13.33B15.6%
- Interest, other & tax$21.83B25.6%
- Net income$35.15B41.3%
Where FY2023 revenue went
$85.16B- Cost of revenue: $26.55B, 31% of revenue
- Other operating costs: $23.29B, 27% of revenue
- SG&A: $21.51B, 25% of revenue
- Operating income: $13.33B, 16% of revenue
- R&D: $483.0M, 0.6% of revenue
Kept 16% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 16, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $85.16B$78.74B | +8.2% |
| Cost of Revenue | $26.55B$23.40B | +13.5% |
| Gross Profit | $58.61B$55.34B | +5.9% |
| R&D Expenses | $483.00M$0 | — |
| SG&A Expenses | $21.51B$20.12B | +6.9% |
| Operating Income | $13.33B$17.80B | −25.1% |
| Interest Expense | $276.00M$183.00M | +50.8% |
| Net Income | $35.15B$20.88B | +68.4% |
| EPS (Basic) | $13.88$7.93 | +75.0% |
| EPS (Diluted) | $13.72$7.81 | +75.7% |
| Shares Outstanding (Basic) | 2.53B2.63B | −3.7% |
| Shares Outstanding (Diluted) | 2.56B2.67B | −4.2% |
05—Questions
Frequently Asked Questions
What were Johnson & Johnson's total sales for 2022?
Johnson & Johnson reported total worldwide sales of $94.9 billion for the fiscal year ended January 1, 2023.
Which segment performed best in terms of sales growth?
The Pharmaceutical segment showed the strongest sales growth with a 1.7% increase, reaching $52.6 billion, driven by strong performance in Oncology and Immunology.
What is the status of the Consumer Health business separation?
Johnson & Johnson announced its intention to separate its Consumer Health business, which will be named Kenvue, with the goal of completing the separation by the end of fiscal year 2023.
What were the major litigation matters impacting the company?
The company is involved in significant litigation concerning talc-related liabilities and opioid marketing practices. While reserves have been established for these matters, the ultimate outcomes remain subject to significant judgment and potential financial impact.
06—Continue