Why did Q4 2024 EPS decline even though sales grew?

Q4 reported net earnings fell 17.0% to $3.43 billion, and adjusted net earnings fell 11.1%. Both EPS figures absorbed a $(0.22) per-share acquired IPR&D charge tied to the V-Wave acquisition. Higher acquisition-related charges and the effect of currency, which reduced reported sales growth by about 1.4 points in Q4, also contributed to the decline.

What does the 2025 guidance imply for growth?

Guidance calls for adjusted operational sales growth of 2.0% to 3.0% (2.5% midpoint), excluding COVID-19 Vaccine and acquisitions and divestitures. Operational sales growth of 2.5% to 3.5% and estimated reported sales of $89.2 billion to $90.0 billion (0.5% to 1.5% growth) are also provided. Adjusted operational EPS of $10.75 to $10.95 implies roughly 8.7% growth at the midpoint, indicating expected margin and earnings leverage despite modest sales growth.

Why was this 8-K amended, and does it change any financial results?

The amendment was filed solely to align the format of the Reported Sales line in Exhibit 99.1 with the press release issued over the newswire. The company states that no reported numbers were affected. The amended exhibit also adds the cover page in Inline XBRL (Exhibit 104).

How did the MedTech and Innovative Medicine segments perform?

For full-year 2024, Innovative Medicine sales were $56.96 billion, up 4.0% reported and 5.8% adjusted operational, with growth led by DARZALEX, ERLEADA, CARVYKTI, and TREMFYA, partly offset by STELARA. MedTech sales were $31.86 billion, up 4.8% reported and 4.7% adjusted operational, driven by electrophysiology, Abiomed, and wound closure products. Excluding COVID-19 Vaccine, Innovative Medicine operational growth was 7.5%.

What are the notable subsequent events and risks to watch?

The company announced its acquisition of Intra-Cellular Therapies to strengthen its neuroscience leadership. On January 5, 2025, J&J MedTech temporarily paused the U.S. External Evaluation and all U.S. VARIPULSE cases, a development investors should monitor. Other risks include currency fluctuations (a $1.6 billion-equivalent or 1.6-point headwind to full-year reported growth), competition, patent expirations, litigation, and the ability to realize benefits from the Kenvue separation.

JNJ 8-K SEC Disclosure — Jan 22, 2025

01—Abstract

Summary

Summary of the 8-K/A filed January 22, 2025. Cited figures are marked; the original filing is the authoritative source.

Johnson & Johnson reported fourth-quarter and full-year 2024 results that showed solid top-line growth but weaker per-share earnings in the quarter.

Q4 reported sales rose 5.3% to $22.52 billion^a, with operational growth of 6.7% and adjusted operational growth of 5.7%. Q4 reported diluted EPS fell 17.1% to $1.41, and adjusted EPS fell 10.9% to $2.04, both reduced by a $0.22 charge for acquired in-process R&D related to the V-Wave acquisition. Full-year reported sales grew 4.3% to $88.8 billion (5.4% adjusted operational growth), and full-year adjusted EPS rose 0.6% to $9.98.

Full-year reported diluted EPS of $5.79^b was up 11.3%, though both EPS figures include a $0.67 acquired IPR&D charge. The company's 2025 guidance calls for adjusted operational sales growth of 2.0% to 3.0% (2.5% midpoint) and adjusted operational EPS of $10.75 to $10.95, implying about 8.7% growth at the midpoint. Investors should note that the guidance excludes COVID-19 Vaccine sales, and that the estimated reported EPS range of $10.50 to $10.70 reflects amortization and special items.

Free cash flow was an estimated roughly $19.8 billion^c for 2024, up from $18.2 billion, which supports continued investment and capital return. This filing is Amendment No. 1 to the January 22, 2025 Form 8-K.

It was filed solely to align the format of the Reported Sales line in Exhibit 99.1 with the newswire version of the press release, and the amendment states that no reported figures changed. Notable subsequent events include the announced acquisition of Intra-Cellular Therapies, which strengthens the Neuroscience franchise, and several regulatory and pipeline milestones.

02—Key points

Key Highlights

Q4 2024 reported sales of $22.52 billion, up 5.3% (operational growth 6.7%, adjusted operational growth 5.7%), with U.S. sales up 10.0%.
Q4 2024 reported diluted EPS of $1.41 (down 17.1%) and adjusted EPS of $2.04 (down 10.9%), both including a $(0.22) V-Wave acquired IPR&D charge.
Full-year 2024 reported sales of $88.8 billion, up 4.3%; operational growth of 5.9% and 7.0% excluding COVID-19 Vaccine.
Full-year 2024 adjusted EPS of $9.98 (up 0.6%) and reported EPS of $5.79 (up 11.3%), with both figures including a $(0.67) acquired IPR&D charge.
2025 guidance: adjusted operational sales growth of 2.0% to 3.0% and adjusted operational EPS of $10.75 to $10.95 (about 8.7% growth at the midpoint).
Full-year 2024 free cash flow estimated at roughly $19.8 billion, compared with $18.2 billion in 2023.
Amendment No. 1 changes only the presentation format of the Reported Sales line in Exhibit 99.1; no reported numbers were affected.

03—Questions

Frequently Asked Questions

Why did Q4 2024 EPS decline even though sales grew?
Q4 reported net earnings fell 17.0% to $3.43 billion, and adjusted net earnings fell 11.1%. Both EPS figures absorbed a $(0.22) per-share acquired IPR&D charge tied to the V-Wave acquisition. Higher acquisition-related charges and the effect of currency, which reduced reported sales growth by about 1.4 points in Q4, also contributed to the decline.
What does the 2025 guidance imply for growth?
Guidance calls for adjusted operational sales growth of 2.0% to 3.0% (2.5% midpoint), excluding COVID-19 Vaccine and acquisitions and divestitures. Operational sales growth of 2.5% to 3.5% and estimated reported sales of $89.2 billion to $90.0 billion (0.5% to 1.5% growth) are also provided. Adjusted operational EPS of $10.75 to $10.95 implies roughly 8.7% growth at the midpoint, indicating expected margin and earnings leverage despite modest sales growth.
Why was this 8-K amended, and does it change any financial results?
The amendment was filed solely to align the format of the Reported Sales line in Exhibit 99.1 with the press release issued over the newswire. The company states that no reported numbers were affected. The amended exhibit also adds the cover page in Inline XBRL (Exhibit 104).
How did the MedTech and Innovative Medicine segments perform?
For full-year 2024, Innovative Medicine sales were $56.96 billion, up 4.0% reported and 5.8% adjusted operational, with growth led by DARZALEX, ERLEADA, CARVYKTI, and TREMFYA, partly offset by STELARA. MedTech sales were $31.86 billion, up 4.8% reported and 4.7% adjusted operational, driven by electrophysiology, Abiomed, and wound closure products. Excluding COVID-19 Vaccine, Innovative Medicine operational growth was 7.5%.
What are the notable subsequent events and risks to watch?
The company announced its acquisition of Intra-Cellular Therapies to strengthen its neuroscience leadership. On January 5, 2025, J&J MedTech temporarily paused the U.S. External Evaluation and all U.S. VARIPULSE cases, a development investors should monitor. Other risks include currency fluctuations (a $1.6 billion-equivalent or 1.6-point headwind to full-year reported growth), competition, patent expirations, litigation, and the ability to realize benefits from the Kenvue separation.

04—Continue

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