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Johnson & Johnson Releases Its 2018 Results: Revenue Up 6.7%

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Revenue trends

Today, Johnson & Johnson (JNJ) released its fourth-quarter and 2018 financial results. Johnson & Johnson’s net revenue rose ~1% YoY (year-over-year) to $20.4 billion in the fourth quarter of 2018. In 2018, the company’s net revenue rose ~6.7% YoY to $81.6 billion from $76.5 billion.

Johnson & Johnson’s Pharmaceuticals segment primarily boosted its revenue growth in 2018 with a 12.4% YoY rise. In the fourth quarter, Johnson & Johnson’s Consumer, Pharmaceuticals, and Medical Devices segments generated revenues of $3.5 billion, $10.2 billion, and $6.7 billion, respectively, representing a ~0.1% YoY fall, a ~5.3% YoY rise, and a 4.4% YoY fall, respectively.

In Johnson & Johnson’s Pharmaceuticals segment, its oncology business primarily pushed its revenue growth in the quarter and the year. In the quarter, the business reported revenue of $2.5 billion, a ~22.1% YoY rise. The business’s net revenue rose ~35.6% YoY to reach $9.8 billion in 2018.

In the fourth quarter, Johnson & Johnson’s immunology drug Stelara saw a sales rise of ~33.6% YoY to $1.4 billion from $1.1 billion.

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Earnings trends

In the fourth quarter, Johnson & Johnson reported net earnings of $3.0 billion compared to its net loss of $10.7 billion in the fourth quarter of 2017. The company reported EPS of $1.12 in the quarter compared to -$3.99 in the same period of the previous year.

In 2018, Johnson & Johnson’s net earnings and diluted EPS amounted to $15.3 billion and $5.61, respectively, compared to $1.3 billion and $0.47, respectively, in 2017.

Johnson & Johnson’s biopharmaceutical peers Pfizer (PFE) and Merck & Co. (MRK) are expected to present their fourth-quarter earnings results on January 29 and February 1, respectively. Analysts expect Pfizer and Merck to generate revenues of ~$13.9 billion and $10.96 billion, respectively, in the quarter, representing rises of ~1.7% and ~5.03% YoY, respectively.

The revenue rises of Johnson & Johnson, Pfizer, and Merck could boost the share price of the Health Care Select Sector SPDR ETF (XLV). Johnson & Johnson, Pfizer, and Merck make up ~10.25%, ~7.19% and ~5.77% of XLV’s total portfolio holdings, respectively.

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