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Must-Read Notes on Johnson & Johnson’s 1Q17 Earnings

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Part 6
Must-Read Notes on Johnson & Johnson’s 1Q17 Earnings PART 6 OF 7

How Johnson & Johnson’s Medical Devices Segment Fared in 1Q17

Medical Devices segment

Johnson & Johnson’s (JNJ) Medical Devices segment’s revenue rose ~3.0% to ~$6.3 billion in 1Q17 compared to 1Q16. This rise included an operational rise of 3.4%, offset by a negative foreign exchange impact.

Cardiovascular care franchise

The segment’s cardiovascular care franchise’s sales rose 12.6% to $499 million in 1Q17. This rise was due to a rise in its electro-physiology business, specifically the Thermocool SmartTouch Contact Force Sensing Catheter.

How Johnson &amp; Johnson’s Medical Devices Segment Fared in 1Q17

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Diabetes care franchise

The diabetes care franchise’s sales fell 7.0% to $399 million in 1Q17 due to pricing pressures and competition from new pumps in the market.

Orthopedics franchise

The orthopedics franchise reported a 0.7% fall in its revenue to $2.3 billion in 1Q17 due to lower sales of its spine products, partially offset by sales of its hip, knee, and trauma products. The franchise’s revenue included an operational fall of 0.2%.

Surgery franchise

The surgery franchise’s sales rose 1.9% to $2.3 billion in 1Q17, driven by increased sales of its endocutter, energy, and biosurgery products in terms of advanced surgery products and its sutures in terms of general surgery products. 

These sales were offset by decreased sales of its hernia products and mechanical products in terms of general surgery products and decreased sales of Mentor in terms of specialty surgery products.

Vision care franchise

The vision care franchise’s sales rose 24.7% to $798 million in 1Q17 due to its strong performance in all major markets worldwide. On an operational basis, the revenue growth for this franchise was 24.5%.

The medical devices sector includes other major companies such as Medtronic (MDT), Boston Scientific (BSX), Stryker (SYK), and Zimmer Biomet Holdings (ZMH).

To divest company-specific risk, investors can consider ETFs such as the SPDR Dow Jones Industrial Average ETF (DIA), which holds 3.8% of its portfolio in Johnson & Johnson.

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