Johnson & Johnson Posts Earnings, Lowers EPS Guidance on April 14



Johnson & Johnson’s earnings performance

Johnson & Johnson (JNJ) posted its 1Q15 earnings on April 14, 2015. The company beat Wall Street EPS (earnings per share) estimates of $1.53 marginally, posting $1.56 EPS. Johnson & Johnson registered adjusted net income of $4.4 billion for the quarter.

Novartis AG (NVS) released its 1Q15 earnings on April 23. Pfizer (PFE) and Merck & Co. (MRK) will both release their earnings on April 28.

Compared to 1Q14, Johnson & Johnson’s 1Q15 adjusted net income declined by 5.9%, and EPS fell by 4.3%. However, excluding the impact of currency fluctuations, EPS grew by 3.7%. The company has consistently beaten Wall Street analysts’ EPS estimates for the last eight quarters.

The company lowered its EPS guidance for 2015 to a range of $6.04 to $6.19, from $6.12 to $6.27. This is due to increasing pressure from a strong US dollar. The company generates ~50% of its revenues outside the United States.

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Key takeaways

The following are some key takeaways from Johnson & Johnson’s 1Q15 performance:

  • There was a significant negative impact of currency exchange fluctuation on the company’s performance.
  • The company’s pharmaceutical segment is driving the growth.
  • The company is expanding its consumer segment in over-the-counter (or OTC), oral care, and baby care categories.
  • Johnson & Johnson is accelerating growth in the medical devices segment through innovation, optimization of product portfolio, and new product launches.
  • The company is experiencing increasing competition in Europe for its leading drug Remicade.

Company overview

Johnson & Johnson (JNJ) is one of the leading and diversified pharmaceutical companies in the United States. The company operates through three business segments: consumer, pharmaceutical, and medical devices. The company operates in 60 countries. Its products are sold in about 200 countries.

To learn more about the pharmaceutical sector, please read What it means to be ‘big pharma’ in a $980 billion industry.

Investors who would like to invest in the pharmaceutical industry and in Johnson & Johnson might consider pharmaceutical funds such as the iShares U.S. Healthcare ETF (IYH) and the Health Care Select Sector SPDR ETF (XLV).

Overview of this series

To understand growth or decline in EPS, we’ll look in this series at revenue drivers, including business segment growth and key drugs growth. We’ll also look at Johnson & Johnson’s earnings, strategic changes, and tactics that management discussed during its 1Q15 earnings call.


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