10-QPeriod: Q1 FY2015

JOHNSON & JOHNSON Quarterly Report for Q1 Ended Mar 29, 2015

Filed May 1, 2015For Securities:JNJ

Summary

Johnson & Johnson (JNJ) reported first-quarter 2015 results showing a 4.1% decrease in worldwide sales to $17.4 billion, primarily driven by unfavorable currency fluctuations (7.2% negative impact) and the impact of competitive products in its Hepatitis C offerings. Despite the sales decline, the company demonstrated resilience with operational growth in key segments. The Pharmaceutical segment saw a 10.2% operational increase, supported by strong performance in Immunology and Oncology, though tempered by competitive pressures in Hepatitis C and the impact of REMICADE® biosimilars. The Consumer segment also posted operational growth, driven by OTC and Skin Care products. The Medical Devices segment experienced an operational decline, partly due to the divestiture of the Ortho-Clinical Diagnostics business. Net earnings for the quarter were $4.3 billion, or $1.53 per diluted share, compared to $4.7 billion, or $1.64 per diluted share, in the prior year. The company continued to return capital to shareholders through dividends and share repurchases, signaling confidence in its financial health and future prospects.

Financial Highlights

54 data points
Beta

Revenue

$17.37B

69.6% Gross Margin

Net Income

$4.32B

24.9% Net Margin

EPS (Diluted)

$1.53

Total Assets

$128.59B

Cash & Equivalents

$11.99B

Free Cash Flow

$2.33B

Financial Statements
Beta
Revenue$17.37B
Cost of Revenue$5.28B
Gross Profit$12.09B
SG&A Expenses$4.85B
Operating Income$5.83B
Interest Expense$138.00M
Net Income$4.32B
EPS (Basic)$1.55
EPS (Diluted)$1.53
Shares Outstanding (Basic)2.78B
Shares Outstanding (Diluted)2.83B

Key Highlights

  • 1Worldwide sales decreased by 4.1% to $17.4 billion in Q1 2015, impacted by a significant 7.2% negative currency effect.
  • 2Pharmaceutical segment sales grew operationally by 10.2% year-over-year, driven by strong performance in Immunology and Oncology, despite competitive pressures in Hepatitis C.
  • 3Consumer segment sales showed operational growth of 3.4%, with notable performance from OTC and Skin Care products.
  • 4Medical Devices segment sales declined operationally by 4.6%, influenced by the divestiture of the Ortho-Clinical Diagnostics business and Vision Care challenges.
  • 5Net earnings decreased to $4.3 billion ($1.53/share) from $4.7 billion ($1.64/share) in the prior year's quarter.
  • 6The company returned significant capital to shareholders through $1.9 billion in dividends and $2.2 billion in share repurchases.
  • 7Despite overall sales decline, the company reported $2.9 billion in cash flow from operations.

Frequently Asked Questions

The primary driver for the decrease in worldwide sales was a significant negative currency fluctuation, which had a 7.2% adverse impact. Additionally, competitive products in the Hepatitis C segment and the divestiture of the Ortho-Clinical Diagnostics business also contributed to the sales decline.

The Pharmaceutical segment demonstrated strong operational growth of 10.2%, driven by Immunology and Oncology. The Consumer segment also achieved operational growth of 3.4%, with key contributions from Over-the-Counter (OTC) and Skin Care products. The Medical Devices segment experienced an operational decline of 4.6%, partly due to the sale of the Ortho-Clinical Diagnostics business and challenges in Vision Care.

Johnson & Johnson continued its commitment to returning capital to shareholders by paying $1.9 billion in dividends and repurchasing $2.2 billion of its common stock during the quarter. The company has an ongoing share repurchase program and intends to continue paying regular quarterly cash dividends.

Johnson & Johnson is involved in numerous legal proceedings, including product liability claims related to hip implants (DePuy ASR and Pinnacle systems), pelvic mesh, and RISPERDAL®. The company is also facing intellectual property disputes and government investigations related to past marketing practices for various products. While the company has accrued for these contingencies, the ultimate outcome of some of these matters could have a material impact on results of operations and cash flows for a specific period.