How did Johnson & Johnson's sales perform in the third quarter of 2022?

Johnson & Johnson reported a 1.9% increase in total sales for the fiscal third quarter ended October 2, 2022, reaching $23.8 billion. This growth was driven by an operational increase of 8.1%, which helped to offset a negative currency impact of 6.2%.

What were the key drivers of sales growth in the Pharmaceutical segment?

The Pharmaceutical segment saw a 2.6% increase in sales. Growth was primarily fueled by strong performance in Oncology, with Darzalex and Erleada showing significant gains, and a 0.9% increase in Immunology, driven by Stelara and Tremfya. However, REMICADE sales declined due to biosimilar competition, and Infectious Diseases sales were impacted by reduced COVID-19 vaccine contributions and competition for key antiviral medications.

What is the status of the planned separation of the Consumer Health business?

Johnson & Johnson remains on track with its plan to separate the Consumer Health business, which will operate as a new, publicly traded company named Kenvue. The company is targeting completion of this separation within 18 to 24 months of the initial announcement in November 2021.

How is the company managing inflationary pressures and currency headwinds?

The company is actively managing inflationary pressures through cost reduction programs, productivity improvements, and periodic price increases. While currency fluctuations had a negative impact on sales, operational growth and strategic pricing actions in several segments helped to mitigate these effects.

JNJ 10-Q Filed Oct 27, 2022

Summary

Johnson & Johnson reported solid results for the fiscal third quarter ended October 2, 2022, with total sales reaching $23.8 billion, a 1.9% increase year-over-year, driven by operational growth that offset currency headwinds. Net earnings for the quarter were $4.5 billion, or $1.68 per diluted share. The Pharmaceutical segment demonstrated strength with a 2.6% sales increase, particularly in Oncology and Immunology, despite headwinds from biosimilar competition for REMICADE and the upcoming patent expiry for STELARA. The MedTech segment also saw a 2.1% sales increase, recovering well from the prior year. Despite a challenging macroeconomic environment marked by inflation and currency fluctuations, the company maintained a strong financial position. Cash flow from operations remained robust at $15.8 billion for the nine months ended October 2, 2022. The company also reiterated its commitment to returning capital to shareholders through dividends and share repurchases, demonstrating confidence in its ongoing performance and future outlook. The planned separation of the Consumer Health business remains on track.

Key Highlights

1Total sales increased by 1.9% to $23.8 billion in Q3 2022, driven by operational growth of 8.1%.
2Net earnings for the quarter were $4.5 billion, with diluted EPS of $1.68, up from $1.37 in the prior year.
3Pharmaceutical segment sales grew 2.6% operationally, with strong performance in Oncology (up 10.9%) and Immunology (up 0.9%), while Infectious Diseases saw a decline (-6.0%) impacted by COVID-19 vaccine sales reduction.
4MedTech segment sales increased by 2.1% operationally, showing recovery in surgical and vision products.
5Consumer Health segment sales decreased by 0.4%, impacted by currency and some product category softness.
6The company generated $15.8 billion in cash flow from operations for the first nine months of 2022.
7Johnson & Johnson announced a new $5.0 billion share repurchase program, with $2.0 billion already repurchased as of October 2, 2022.

JOHNSON & JOHNSON Quarterly Report for Q3 Ended Oct 2, 2022

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