Summary
Johnson & Johnson (JNJ) reported solid financial results for the second quarter and the first half of fiscal year 2008, demonstrating resilience in a challenging economic environment. Sales grew by 8.7% in the second quarter and 8.2% for the first half, driven by strong international performance, particularly in the Asia-Pacific and Europe regions, as well as a favorable currency exchange rate impact. The Consumer and Medical Devices & Diagnostics segments showed robust operational growth, while the Pharmaceutical segment experienced a slight operational decline, largely due to patent expirations and generic competition for key products like Risperdal. Despite increased borrowing to support share repurchases, the company maintained healthy cash flow from operations, which increased by $7.1 billion year-over-year to $13.1 billion. JNJ also continued its commitment to shareholder returns by increasing its quarterly dividend, marking the 46th consecutive year of dividend increases. The company's diversified business model across consumer health, pharmaceuticals, and medical devices provided a strong foundation, although ongoing legal proceedings and patent expirations represent areas for investor attention.
Financial Highlights
31 data points| Revenue | $16.45B |
| Cost of Revenue | $4.75B |
| Gross Profit | $11.70B |
| SG&A Expenses | $5.51B |
| Interest Expense | $105.00M |
| Net Income | $3.33B |
| EPS (Basic) | $1.18 |
| EPS (Diluted) | $1.17 |
| Shares Outstanding (Basic) | 2.81B |
| Shares Outstanding (Diluted) | 2.84B |
Key Highlights
- 1Total sales increased by 8.7% to $16.45 billion in Q2 2008 and 8.2% to $32.64 billion for the first six months of 2008, with international sales showing particularly strong growth (16.2% in Q2, 15.0% YTD).
- 2Operational sales growth was 3.1% for Q2 and 2.8% for the first six months, indicating underlying business expansion alongside positive currency impacts.
- 3The Consumer segment experienced strong sales growth of 13.2% in Q2 and 14.7% YTD, driven by key franchises like OTC Pharmaceuticals & Nutritionals and Baby Care.
- 4The Medical Devices & Diagnostics segment also saw significant growth, with Q2 sales up 12.1% and YTD sales up 9.7%, supported by strong performance in DePuy and Ethicon.
- 5The Pharmaceutical segment's sales increased by 3.1% in Q2 and 3.2% YTD, but faced operational declines due to the impact of generic competition and patent expirations for products like Risperdal.
- 6Net earnings increased to $3.33 billion in Q2 2008 from $3.08 billion in Q2 2007, with diluted EPS rising to $1.17 from $1.05.
- 7Cash flow from operations remained strong at $6.1 billion for the first six months of 2008, contributing to an increase in cash and cash equivalents to $12.6 billion.
- 8The company declared a quarterly cash dividend of $0.460 per share, representing a 10.8% increase and the 46th consecutive year of dividend increases.