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How Is Johnson & Johnson Positioned after 3Q17?

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Johnson & Johnson’s revenue trends

In 3Q17, Johnson & Johnson (JNJ) generated revenues of $19.7 billion, ~10.3% growth on a year-over-year (or YoY) basis. In 3Q17, Johnson & Johnson’s consumer segment, pharmaceuticals segment, and medical devices segment generated revenues of $3.4 billion, $9.7 billion, and $6.6 billion, respectively, which reflected ~2.9%, ~15.4%, and ~7.1% increases on a YoY basis.

In 3Q17, in the US market and outside the US markets (international markets), Johnson & Johnson generated net revenues of $10.3 billion and $9.4 billion, respectively, which reflected ~9.7% and 10.9% growth on a year-over-year basis. Johnson & Johnson reported year-to-date September 2017 revenues of $56.3 billion compared to $53.8 billion in YTD September 2016, ~4.6% growth on a YoY basis.

In 3Q17, Johnson & Johnson reported net earnings of $3.8 billion compared to $4.3 billion in 3Q16, reflecting 11.9% growth on a YoY basis. In 3Q17, Johnson & Johnson reported diluted net earnings per share of $1.37 compared to $1.53 in 3Q16.

Johnson & Johnson reported YTD September 2017 net earnings and diluted EPS of $12.0 billion and $4.37, respectively, compared to $12.7 billion and $4.55, in the corresponding period in 2016.

Expense trends

In 3Q17, Johnson & Johnson reported the cost of products sold of $6.9 billion compared to $5.5 billion in 3Q16. In 3Q17, Johnson & Johnson reported SM&A (selling, marketing, and administrative) and R&D (research and development) expenses of $5.4 billion and $2.6 billion, respectively, compared to $4.8 billion and $2.2 billion in 3Q16.

In YTD September 2017, the company reported cost of product sales, SM&A, and R&D expenses of $18.1 billion, $15.4 billion, and $6.9 billion, respectively, compared to $16.2 billion, $14.6 billion, and $6.5 billion in YTD September 2016.

In 3Q17, Pfizer (PFE), Roche (RHHBY), and Novartis (NVS), Johnson & Johnson’s peers in the biopharmaceuticals market, generated revenues of $13.2 billion, 13.1 billion Swiss francs, and $12.4 billion, respectively. The revenue growth of Johnson & Johnson could boost the SPDR S&P 500 ETF (SPY). Johnson & Johnson makes up about ~1.7% of SPY’s total portfolio holding.

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