Summary
Johnson & Johnson reported solid overall sales growth for the second quarter and first six months of fiscal year 2016, driven primarily by its Pharmaceutical segment. Worldwide sales increased by 3.9% in the second quarter and 2.3% for the year-to-date period compared to the prior year, with operational growth offsetting negative currency impacts. The Pharmaceutical segment showed robust performance, with sales up 8.9% for the quarter, bolstered by strong immunology and oncology product sales, though it faced headwinds from Hepatitis C products and the impending biosimilar competition for REMICADE® in the US. The Consumer segment experienced a slight decline in sales, while the Medical Devices segment saw modest growth. Profitability was impacted by several factors, including a significant increase in litigation expenses in the Medical Devices segment and restructuring charges. Net earnings for the second quarter decreased by 11.5% to $3,997 million, or $1.43 per diluted share, compared to $4,516 million, or $1.61 per diluted share, in the prior year. For the six-month period, net earnings decreased by 4.3% to $8,454 million, or $3.02 per diluted share, down from $8,836 million, or $3.13 per diluted share, in the prior year. Despite the earnings decline, the company continued to return capital to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value.
Financial Highlights
53 data points| Revenue | $18.48B |
| Cost of Revenue | $5.34B |
| Gross Profit | $13.15B |
| SG&A Expenses | $5.18B |
| Interest Expense | $190.00M |
| Net Income | $4.00B |
| EPS (Basic) | $1.46 |
| EPS (Diluted) | $1.43 |
| Shares Outstanding (Basic) | 2.75B |
| Shares Outstanding (Diluted) | 2.79B |
Key Highlights
- 1Worldwide sales grew 3.9% to $18.5 billion in Q2 2016, driven by operational growth of 5.3% which offset a 1.4% negative currency impact.
- 2The Pharmaceutical segment was the strongest performer, with Q2 sales up 8.9% to $8.7 billion, driven by Immunology (up 19.0%) and Oncology (up 28.8%) products.
- 3Net earnings for Q2 2016 decreased by 11.5% to $3,997 million, primarily due to increased litigation expenses and restructuring charges.
- 4Diluted EPS for Q2 2016 was $1.43, down from $1.61 in the prior year, reflecting the decline in net earnings.
- 5The company returned $4.27 billion to shareholders through dividends and repurchased $4.75 billion in stock during the first six months of 2016.
- 6Significant litigation expenses and restructuring charges, particularly within the Medical Devices segment, impacted profitability.
- 7The company is actively managing its legal proceedings, with ongoing developments in product liability cases and patent disputes, including the anticipation of REMICADE® biosimilar competition in the US.