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Johnson & Johnson’s Q1 2018 Financial Performance

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Revenue trends

Johnson & Johnson (JNJ) reported net revenues of $20.0 billion in the first quarter, compared to $17.8 billion in the first quarter of 2017. This reflected an ~12.6% increase YoY (year-over-year) and an ~1.0% decline sequentially.

In the US and in its international markets, Johnson & Johnson generated first-quarter revenues of ~$10.0 billion and ~$10.1 billion, respectively. These revenues compared to ~$9.4 billion and ~$8.4 billion in the first quarter of 2017, respectively, which reflected YoY growth of ~6.1% and ~19.9%.

Wall Street analysts expect Johnson & Johnson to report revenues of $20.4 billion in the second quarter, representing ~8.2% YoY growth. Johnson & Johnson reported net earnings of $4.37 billion in the first quarter, compared to $4.42 billion in the first quarter of 2017—a decline of ~1.2% YoY.

In the first quarter, Johnson & Johnson reported diluted net EPS of $1.60 compared to $1.61 in the first quarter of 2017. Johnson & Johnson reported adjusted EPS of $2.06 in the first quarter, which reflected ~12.6% growth on a YoY basis.

Johnson & Johnson’s Consumer, Pharmaceuticals, and Medical Devices segments generated net worldwide revenues of $3.4 billion, $9.8 billion, and $6.8 billion. These revenues represent YoY growth of ~5.3%, ~19.4%, and 7.5%, respectively.

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Expense trends

In the first quarter, Johnson & Johnson reported its cost of products sold of $6.6 billion compared to $5.4 billion in the first quarter of 2017, which represents ~22.0% YoY growth.

In the first quarter, Johnson & Johnson reported SM&A (selling, marketing, and administrative) and R&D (research & development) expenses of $5.3 billion and $2.4 billion, respectively. These expenses compared to $4.8 billion and $2.1 billion in the first quarter of 2017, respectively, representing ~10.5% and ~16.1% YoY growth.

Guidance for 2018

Johnson & Johnson (JNJ) expects its fiscal 2018 net revenues to reach $81.0 billion–$81.8 billion. Johnson & Johnson expects operational growth of 4.0%–5.0% in fiscal 2018, and it expects adjusted EPS of $8.00–$8.20 in fiscal 2018.

Among Johnson & Johnson’s peers in the biopharmaceuticals market, Pfizer (PFE), Merck (MRK), and Amgen (AMGN) reported revenues of $12.9 billion, $10.4 billion, and $5.6 billion, respectively, in the first quarter.

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