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How Johnson & Johnson’s Business Segments Performed

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Business segments

Johnson & Johnson’s (JNJ) business is segregated into three business segments:

  • Pharmaceuticals
  • Consumer
  • Medical Devices

The company reported a 2.9% increase in operating revenues to $18.8 billion during 2Q17, offset by a 1% negative impact from foreign exchange. At constant exchange rates, the company reported growth across all segments.

The above chart shows segment-wise revenues for Johnson & Johnson over the last few quarters.

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Segment-wise performance

The pharmaceuticals segment reported a 1% growth in revenues at constant exchange rates to $8.6 billion during 2Q17 as compared to 2Q16 revenues. The growth was partially offset by a 1.2% negative impact from foreign exchange. The increased sales of Darzalex and Ibruvica from the oncology franchise contributed to the operational growth of the segment, partially impacted by lower sales from major cardiovascular products, immunology products, the company’s infectious diseases portfolio, and neuroscience products.

The consumer segment reported a 2.3% increase in revenues at constant exchange rates to $3.5 billion for 2Q17 as compared to 2Q16. The growth was partially offset by a 0.6% negative impact from foreign exchange. The increased sales of beauty products, over-the-counter products, and wound care products contributed to the operational growth of the segment, partially impacted by lower sales of baby care products, oral care products, and women’s health products.

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The medical devices segment reported a 5.9% increase in revenues at constant exchange rates to $6.7 billion during 2Q17 as compared to 2Q16. The growth was partially offset by a 1% negative impact from foreign exchange. The increased sales of advanced surgery products, vision care products, and cardiovascular products, as well as the inclusion of revenues from Abbott Medical Optics contributed to the operational growth of the segment. The growth was partially offset by the divestiture of the Cordis business in 4Q15 and lower sales of diabetes care and surgery products.

If we exclude the impacts of the Abbott Medical Optics acquisition, the Cordis divestiture, and other acquisitions and divestitures, the Pharmaceutical segment reported growth of 0.5%, the Consumer segment reported a decrease of 0.8%, and the Medical Devices segment reported growth of 1.1% in total sales.

The Vanguard Dividend Appreciation ETF (VIG) has 4.2% of its total assets in Johnson & Johnson. VIG also has 3.2% in Medtronic (MDT), 2.3% in Abbott Laboratories (ABT), and 1.5% in Stryker (SYK).

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