10-QPeriod: Q1 FY2014

JOHNSON & JOHNSON Quarterly Report for Q1 Ended Mar 30, 2014

Filed May 2, 2014For Securities:JNJ

Summary

Johnson & Johnson reported a solid first quarter for 2014, with worldwide sales reaching $18.1 billion, a 3.5% increase year-over-year. This growth was primarily driven by a robust performance in the Pharmaceutical segment, which saw a 10.8% total sales increase, fueled by strong performances in immunology, infectious diseases, and oncology. The Medical Devices and Diagnostics segment remained flat year-over-year, while the Consumer segment experienced a slight decline. Net earnings for the quarter were $4.7 billion, resulting in diluted EPS of $1.64, a notable increase from the prior year's $1.22. The company generated strong operating cash flow of $3.9 billion, despite significant uses of cash for investing activities, primarily in marketable securities, and financing activities, including dividends and share repurchases. The company also announced plans to divest its Ortho-Clinical Diagnostics business, a significant move that will reshape its business portfolio. Despite ongoing legal challenges, particularly in product liability, Johnson & Johnson maintains a confident outlook, stating that the ultimate outcome of these proceedings is not expected to have a material adverse effect on its financial position.

Financial Highlights

54 data points
Beta

Revenue

$18.11B

69.9% Gross Margin

Net Income

$4.73B

26.1% Net Margin

EPS (Diluted)

$1.64

Total Assets

$133.33B

Cash & Equivalents

$19.72B

Free Cash Flow

$3.29B

Financial Statements
Beta
Revenue$18.11B
Cost of Revenue$5.46B
Gross Profit$12.66B
SG&A Expenses$5.18B
Operating Income$5.65B
Interest Expense$136.00M
Net Income$4.73B
EPS (Basic)$1.67
EPS (Diluted)$1.64
Shares Outstanding (Basic)2.83B
Shares Outstanding (Diluted)2.87B

Key Highlights

  • 1Worldwide sales increased by 3.5% to $18.1 billion, driven by the Pharmaceutical segment's 10.8% growth.
  • 2Net earnings rose to $4.7 billion, with diluted EPS reaching $1.64, up from $1.22 in the prior year.
  • 3Strong operational cash flow of $3.9 billion was generated, supporting investing and financing activities.
  • 4The company announced the planned divestiture of its Ortho-Clinical Diagnostics business for approximately $4.0 billion.
  • 5The Pharmaceutical segment showed significant growth, particularly in Immunology, Infectious Diseases, and Oncology therapeutic areas.
  • 6Despite a flat performance in Medical Devices and Diagnostics and a slight decline in Consumer sales, overall company performance was positive.
  • 7Johnson & Johnson continued to return capital to shareholders through dividends and share repurchases.

Frequently Asked Questions

Johnson & Johnson reported a 3.5% increase in worldwide sales to $18.1 billion for the first quarter of 2014. Net earnings were $4.7 billion, leading to diluted earnings per share (EPS) of $1.64, a significant improvement from $1.22 in the same period last year. This growth was primarily fueled by the Pharmaceutical segment.

The Pharmaceutical segment was the primary growth driver, with sales up 10.8%. The Medical Devices and Diagnostics segment was flat year-over-year, while the Consumer segment experienced a slight sales decrease of 3.2%.

Johnson & Johnson announced its intention to divest its Ortho-Clinical Diagnostics business for approximately $4.0 billion. This strategic move is expected to streamline the company's portfolio. Additionally, the company is working on integrating acquired businesses and managing ongoing litigations.

The company generated strong operating cash flow of $3.9 billion. Significant cash was used for investing activities, mainly in marketable securities, and financing activities, including $1.9 billion in dividends to shareholders and $0.8 billion for share repurchases. The company expects to continue its practice of paying regular quarterly cash dividends.