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Johnson & Johnson’s Segment-Wise Performance in 4Q17

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Segment-wise performance

In 4Q17, Johnson & Johnson (JNJ) reported 9.4% growth in operating revenues and a 2.1% positive impact of foreign exchange to ~$20.2 billion. In comparison, its 4Q16 revenues were ~$18.1 billion.

Johnson & Johnson reported growth across its three segments: Pharmaceuticals, Consumer, and Medical Devices. The chart below compares revenues for each business segment since 1Q16.

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Pharmaceuticals segment’s revenues

Johnson & Johnson’s (JNJ) Pharmaceuticals segment reported 17.6% growth in revenues to ~$9.7 billion during 4Q17, compared to ~$8.2 billion during 4Q16. The segment’s revenues rose 15.5% at constant exchange rates, while its foreign exchange had a 2.1% positive impact on revenues during 4Q17.

The segment’s growth was driven by Stelara and Simponi/Simponi Aria from the immunology franchise and Edurant and Prezista/Prezcobix from the infectious diseases franchise.

The Pharmaceuticals segment’s growth was also driven by Concerta and Invega Sustenna/Xeplion from the neuroscience franchise; Darzalex, Imbruvica, and Zytiga from the oncology franchise; Xarelto from the cardiovascular franchise; and pulmonary hypertension products.

Consumer segment’s revenues

Johnson & Johnson’s Consumer segment reported 3.1% growth in revenues to ~$3.5 billion during 4Q17 compared to ~$3.4 billion during 4Q16. The segment’s revenues rose 0.4% at constant exchange rates, while its foreign exchange had a 2.7% positive impact on its revenues.

The Consumer segment’s revenue growth was driven by strong performance of over-the-counter products, beauty care products, and wound care products. Its performance was substantially offset by lower sales of baby care products, women’s health products, and oral care products.

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Medical Devices segment’s revenues

Johnson & Johnson’s (JNJ) Medical Devices segment reported 8.3% growth in revenues to ~$7.0 billion during 4Q17 compared to ~$6.4 billion during 4Q16. The segment’s revenues increased 6.5% at constant exchange rates, while its foreign exchange had a 1.5% positive impact on revenues.

The growth for the Medical Devices segment was driven by strong performance of cardiovascular products; hips, knees, and trauma products from orthopedic products portfolio; general and advanced surgery products; and contact lenses from the vision care products.

Worldwide sales

In excluding the impact of acquisitions and divestitures, JNJ’s Pharmaceuticals segment reported growth of 7.6% in worldwide sales. Its Consumer segment reported growth of 0.2% in worldwide sales, and its Medical Devices segment reported growth of 2.0% in worldwide sales.

The Vanguard Value ETF (VTV) holds 12.6% of its total investments in healthcare companies. VTV holds 3.0% in Johnson & Johnson (JNJ), 1.7% in Pfizer (PFE), 1.2% in Merck & Co. (MRK), and 1.0% in Amgen (AMGN).

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