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Johnson & Johnson’s Growth Rates and Trends in 3Q17

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Jan. 3 2018, Updated 10:33 a.m. ET

Johnson & Johnson’s growth rate

As we discussed earlier, Johnson & Johnson (JNJ) reported revenues of ~$19.7 billion during 3Q17. These revenues were driven by a 10.3% growth in revenues, 9.5% growth in revenues at constant exchange rates, and a 0.8% positive impact of foreign exchange.

The graph above compares the changes in the growth rate and the impact of foreign exchange since 4Q15.

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Impact of foreign exchange

Johnson & Johnson’s products are sold in more than 200 countries. The company also has ~134 manufacturing units and eight research centers around the globe.

Its revenues from outside the US markets contribute more than 47% of total revenues for the company. So, the foreign exchange has a huge impact on the company’s overall revenues. During 3Q17, foreign exchange had a 0.8% positive impact on the total revenues for Johnson & Johnson.

Growth drivers

Johnson & Johnson (JNJ) has restructured its business over the last few years and now classifies its product portfolio into three business segments: Pharmaceuticals, Consumer, and Medical Devices.

The revenue growth for Johnson & Johnson is driven by increased sales of several key products from its Pharmaceutical segment, Consumer segment, and Medical Devices segment. For the Pharmaceutical segment, the growth is driven by strong sales of Imbruvica, Darzalex, Edurant, Invega Sustenna, Xarelto, Zytiga, and Stelara.

For the Consumer segment, the growth is driven by strong sales of beauty care products, over-the-counter products, women’s health products, and wound care products. For the Medical Devices segment, the growth is driven by strong sales of cardiovascular products, general and advanced surgery products, hip and knee products, and vision care products.

The iShares Morningstar Large-Cap ETF (JKD) holds 20.9% of its total investments in healthcare companies. JKD holds 5.7% in Johnson & Johnson (JNJ), 2.4% in AbbVie (ABBV), 1.7% in Medtronic (MDT), and 1.5% in Abbott Laboratories (ABT).

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