What were the primary drivers of sales growth in the first quarter of 2002?

Sales growth was primarily driven by strong performance in the Pharmaceutical segment, with key products like PROCRIT/EPREX, RISPERDAL, REMICADE, and TOPAMAX, and the Medical Devices & Diagnostics segment, which saw growth from Cordis' circulatory disease management products, DePuy's orthopaedics, and LifeScan's blood glucose monitoring products. The Consumer segment also contributed with brands like NEUTROGENA and JOHNSON'S baby products.

How did currency fluctuations impact Johnson & Johnson's results?

The stronger U.S. dollar had a negative impact on reported sales. For the first quarter of 2002, currency fluctuations decreased consolidated sales by 2.1%. However, when looking at international sales, the operational growth was 8.0%, which was partially offset by a 4.7% negative currency impact, leading to a reported international sales increase of 2.6%.

What is the company's financial position regarding cash and debt?

Johnson & Johnson maintained a solid liquidity position, with cash and cash equivalents plus marketable securities totaling $7.4 billion at the end of the first quarter of 2002. Total borrowings increased slightly to $2.9 billion, and total debt represented a modest 10.9% of the total capital. The company also has a significant stock repurchase program in place.

Are there any significant legal matters that could impact the company?

Yes, the company is involved in numerous legal proceedings. A significant ongoing matter concerns the drug PROPULSID, with over 977 lawsuits filed. While Johnson & Johnson is vigorously defending these claims and believes it has adequate reserves and insurance, an unfavorable outcome could have a material impact. An arbitration proceeding with Amgen regarding PROCRIT license rights is also material, with a decision expected soon.

JNJ 10-Q Quarterly Report Q1 FY2002 — Revenue, Net Income, EPS

Summary

Johnson & Johnson reported solid first-quarter 2002 results, demonstrating robust top-line growth and improved profitability. Consolidated sales increased by 11.3% year-over-year to $8.74 billion, driven by strong performance across all three business segments: Consumer, Pharmaceutical, and Medical Devices & Diagnostics. Net earnings also saw a significant increase of 18.2%, reaching $1.83 billion, with diluted earnings per share rising to $0.59 from $0.50 in the prior year. The company highlighted strong operational performance, with international sales showing a notable increase of 8.0% when adjusted for currency fluctuations. Key product drivers included PROCRIT/EPREX, RISPERDAL, REMICADE, and TOPAMAX within the Pharmaceutical segment, and growth in circulatory disease management, orthopaedics, and minimally invasive surgical products in the Medical Devices & Diagnostics segment. The Consumer segment showed modest growth, supported by brands like NEUTROGENA and JOHNSON'S baby products. Financially, JNJ maintained a strong liquidity position, with cash and marketable securities totaling $7.4 billion. The company also announced a significant increase in its quarterly dividend and a substantial stock repurchase program, signaling confidence in its future performance and commitment to returning value to shareholders. While facing ongoing legal proceedings, particularly concerning the drug PROPULSID, the company expressed confidence in its ability to manage these matters.

Key Highlights

1Consolidated sales increased 11.3% to $8.74 billion in Q1 2002 compared to Q1 2001.
2Net earnings rose 18.2% to $1.83 billion, with diluted EPS increasing to $0.59 from $0.50.
3Pharmaceutical and Medical Devices & Diagnostics segments showed strong double-digit operational sales growth.
4International sales grew 2.6% on a reported basis, and a stronger 8.0% operationally, excluding currency impacts.
5The company announced a stock repurchase program of up to $5 billion and increased its quarterly dividend by 13.9% to $0.205 per share.
6Significant legal proceedings related to the drug PROPULSID continue, with an appeal planned for a recent verdict.
7Johnson & Johnson completed the acquisition of Tibotec-Virco NV, a biopharmaceutical company focused on anti-viral treatments, for approximately $320 million.

JOHNSON & JOHNSON Quarterly Report for Q1 Ended Mar 31, 2002

Summary

Key Highlights

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