Summary
Johnson & Johnson reported solid top-line growth in its Q2 2011 filing, with worldwide sales increasing by 8.3% to $16.6 billion year-over-year, driven by strong performance in international markets and a favorable currency impact. The Pharmaceutical segment was a key contributor, showing a 12.2% sales increase, bolstered by REMICADE® and international growth. The Medical Devices and Diagnostics segment also saw growth, though impacted by the discontinuation of certain coronary stent products and the lingering effects of the DePuy ASR™ Hip recall. However, the Consumer segment experienced a sales decline, partly due to manufacturing issues at its McNeil Consumer Healthcare division and an operational decline in OTC Pharmaceuticals and Nutritionals. Net earnings saw a decrease compared to the prior year, influenced by increased restructuring charges and litigation expenses, particularly in the Medical Devices and Diagnostics segment, and the impact of U.S. healthcare reform. Despite a dip in net earnings, the company maintained a strong financial position with significant cash and cash equivalents. Johnson & Johnson continued its commitment to shareholder returns by declaring an increased quarterly cash dividend. The company also announced a significant acquisition agreement for Synthes, Inc., signaling continued strategic growth initiatives, alongside ongoing efforts to manage legal challenges and operational improvements, especially within the Consumer segment.
Financial Highlights
55 data points| Revenue | $16.60B |
| Cost of Revenue | $5.17B |
| Gross Profit | $11.43B |
| SG&A Expenses | $5.21B |
| Operating Income | $3.54B |
| Interest Expense | $129.00M |
| Net Income | $2.78B |
| EPS (Basic) | $1.01 |
| EPS (Diluted) | $1.00 |
| Shares Outstanding (Basic) | 2.74B |
| Shares Outstanding (Diluted) | 2.78B |
Key Highlights
- 1Worldwide sales increased by 8.3% to $16.6 billion in Q2 2011 compared to Q2 2010, driven by international growth and a positive currency impact.
- 2The Pharmaceutical segment delivered robust growth with sales up 12.2%, significantly boosted by REMICADE® and international expansion.
- 3Medical Devices and Diagnostics segment sales grew 7.2%, but operating profit was significantly impacted by restructuring charges ($676 million) related to Cordis Corporation and DePuy ASR™ Hip recall costs.
- 4Consumer segment sales saw a 4.0% increase, but experienced an operational decline, with the OTC Pharmaceuticals and Nutritionals franchise negatively affected by manufacturing issues at McNeil Consumer Healthcare facilities.
- 5Net earnings decreased to $2.78 billion in Q2 2011 from $3.45 billion in Q2 2010, largely due to increased restructuring and litigation expenses.
- 6The company announced a definitive agreement to acquire Synthes, Inc. for approximately $21.3 billion, strengthening its position in orthopaedics.
- 7Johnson & Johnson maintained a strong liquidity position with $15.0 billion in cash and cash equivalents as of July 3, 2011, and continued its track record of increasing dividends.