A look at Johnson & Johnson
Headquartered in New Brunswick, New Jersey, Johnson & Johnson (JNJ) is one of the world’s largest pharmaceutical and healthcare companies. The company has an operational presence in more than 60 countries and supplies products to over 200 countries worldwide.
Johnson & Johnson released its 1Q17 earnings on April 18, 2017, reporting a ~1.6% rise in its top line in 1Q17 compared to 1Q16. The company missed Wall Street analysts’ consensus estimate of $18.0 billion for revenue, reporting revenue of $17.8 billion in 1Q17.
However, JNJ surpassed analysts’ consensus EPS (earnings per share) estimate of $1.76, reporting EPS of $1.83 in 1Q17.
JNJ fell ~3.1% to close at $121.82 on April 18, 2017, compared to its previous close of $125.72 a day earlier. Its share price fell another 0.4% to close at $121.37 on April 19.
These falls in its share price represent investors’ disappointment in its lower-than-expected revenue. Overall, Johnson & Johnson’s stock value has improved ~7.7% over the last 12 months.
Johnson & Johnson’s top line rose 1.6% to ~$17.8 billion in 1Q17, driven by operational growth of 2.0% in its revenue, which was offset by a currency impact of -0.4%. At constant exchange rates, its Consumer segment’s revenue rose 0.8%, its Pharmaceutical segment’s revenue rose 1.4%, and its Medical Devices segment’s revenue rose 3.4% in 1Q17.
Geographically, the US markets contributed nearly 52.8% of JNJ’s total revenue at $9.4 billion in 1Q17, a rise of 0.6% compared to 1Q16. The international markets reported revenue of $8.4 billion, including operational growth of 3.6%, offset by a -0.8% foreign exchange impact in 1Q17.
To divest company-specific risk, investors can consider ETFs such as the iShares US Healthcare ETF (IYH), which holds 10.8% of its total assets in Johnson & Johnson. IYH also holds 6.8% of its total assets in Pfizer (PFE), 3.4% in AbbVie (ABBV), and 6.2% in Merck & Co. (MRK).