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How Johnson & Johnson’s Medical Devices Segment Performed

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Sep. 29 2017, Updated 7:38 a.m. ET

Medical devices segment

Johnson & Johnson’s (JNJ) medical devices segment includes cardiovascular care, diabetes care, orthopedics, surgery, and vision care products. The segment reported a 4.9% increase in revenues to $6.7 billion in 2Q17 as compared to revenues of $6.4 billion for 2Q16.

The above chart shows revenues for the medical devices segment over the last few quarters. The segment reported growth of 5.9% at constant exchange rates, offset by a 1% negative impact from foreign exchange.

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Cardiovascular care franchise

The cardiovascular care franchise reported an 11.3% increase in revenues to $523 million in 2Q17 as compared to 2Q16. The growth was driven by an increase in the electrophysiology business including Thermocool smart touch contact force sensing catheter.

Diabetes care franchise

The diabetes care franchise reported a 10.6% decline in revenues to $421 million in 2Q17 as compared to 2Q16, driven by pricing pressure and competition from new pumps in the market.

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Orthopedics franchise

The orthopedics franchise reported a 0.5% decline in revenues to $2.3 billion during 2Q17 as compared to 2Q16, driven by lower sales of spine products, partially offset by an increase in sales of hip, knee, and trauma products.

Surgery franchise

The surgery franchise reported a 0.5% decline in revenues to $2.4 billion during 2Q17 as compared to 2Q16. The decline was driven by lower sales of endo-mechanical products, general surgery products, Sterilmed and ASP, and Mentor, substantially offset by increased sales of endocutters, energy products, biosurgery products, and sutures.

Vision care franchise

The vision care franchise reported a 54% increase in revenues of $1.06 billion in 2Q17 as compared to 2Q16, driven by the inclusion of products from Abbott Medical Optics, as well as new products including DEFINE and OASYS 1-Day products.

To divest the company-specific risk, investors can consider ETFs like the First Trust NASDAQ Pharmaceuticals ETF (FTXH), which holds 8.2% in Johnson & Johnson (JNJ). FTXH also holds 4.6% in Bristol-Myers Squibb (BMY), 4.1% in Allergan (AGN), and 10.4% in AbbVie (ABBV).

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