Full Press Release Details
| Johnson Johnson and Subsidiaries | ||||||||||||||||
| Condensed Consolidated Statement of Earnings | ||||||||||||||||
| (Unaudited in Millions Except Per Share Figures) | FIRST QUARTER | |||||||||||||||
| 2024 | 2023 | Percent | ||||||||||||||
| Percent | Percent | Increase | ||||||||||||||
| Amount | to Sales | Amount | to Sales | (Decrease) | ||||||||||||
| Sales to customers | $ | 21,383 | 100.0 | $ | 20,894 | 100.0 | 2.3 | |||||||||
| Cost of products sold | 6,511 | 30.4 | 6,687 | 32.0 | (2.6) | |||||||||||
| Gross Profit | 14,872 | 69.6 | 14,207 | 68.0 | 4.7 | |||||||||||
| Selling, marketing and administrative expenses | 5,257 | 24.6 | 4,906 | 23.5 | 7.2 | |||||||||||
| Research and development expense | 3,542 | 16.6 | 3,455 | 16.6 | 2.5 | |||||||||||
| In-process research and development impairments | - | - | 49 | 0.2 | ||||||||||||
| Interest (income) expense, net | (209) | (1.0) | 14 | 0.1 | ||||||||||||
| Other (income) expense, net | 2,404 | 11.2 | 6,940 | 33.2 | ||||||||||||
| Restructuring | 164 | 0.8 | 130 | 0.6 | ||||||||||||
| Earnings (loss) before provision for taxes on income | 3,714 | 17.4 | (1,287) | (6.2) | ||||||||||||
| Provision for (Benefit from) taxes on income | 459 | 2.2 | (796) | (3.9) | ||||||||||||
| Net earnings (loss) from Continuing Operations | $ | 3,255 | 15.2 | $ | (491) | (2.3) | ||||||||||
| Net earnings from Discontinued Operations, net of tax | - | 423 | ||||||||||||||
| Net earnings (loss) | $ | 3,255 | $ | (68) | ||||||||||||
| Net earnings (loss) per share (Diluted Basic) from Continuing Operations | $ | 1.34 | $ | (0.19) | ||||||||||||
| Net earnings per share (Diluted) from Discontinued Operations | $ | - | $ | 0.16 | ||||||||||||
| Average shares outstanding (Diluted Basic) | 2,430.1 | 2,605.5 | * | |||||||||||||
| Effective tax rate from Continuing Operations | 12.4 | % | 61.8 | % | ||||||||||||
| Adjusted earnings from Continuing Operations before provision for taxes and net earnings (1) (A) | ||||||||||||||||
| Earnings before provision for taxes on income from Continuing Operations | $ | 7,877 | 36.8 | $ | 7,536 | 36.1 | 4.5 | |||||||||
| Net earnings from Continuing Operations | $ | 6,580 | 30.8 | $ | 6,340 | 30.3 | 3.8 | |||||||||
| Net earnings per share (Diluted) from Continuing Operations | $ | 2.71 | $ | 2.41 | 12.4 | |||||||||||
| Average shares outstanding (Diluted) | 2,430.1 | 2,634.3 | ||||||||||||||
| Effective tax rate from Continuing Operations | 16.5 | % | 15.9 | % | ||||||||||||
| *Basic shares are used to calculate loss per share in the first quarter of 2023 as use of diluted shares when in a loss position would be anti-dilutive | ||||||||||||||||
| (1) See Reconciliation of Non-GAAP Financial Measures. | ||||||||||||||||
| (A) NON-GAAP FINANCIAL MEASURES Adjusted earnings from continuing operations before provision for taxes on income, adjusted net earnings from continuing operations, adjusted net earnings per share (diluted) from continuing operations, and adjusted effective tax rate from continuing operations are non-GAAP financial measures and should not be considered replacements for GAAP results. The Company provides earnings from continuing operations before provision for taxes on income, net earnings from continuing operations, net earnings per share (diluted) from continuing operations, and effective tax rate from continuing operations on an adjusted basis because management believes that these measures provide useful information to investors. Among other things, these measures may assist investors in evaluating the Company's results of operations period over period. In various periods, these measures may exclude such items as intangible asset amortization expense, significant gains from divestitures, significant costs associated with acquisitions, restructuring, litigation, and changes in applicable laws and regulations (including significant accounting or tax matters). Special items may be highly variable, difficult to predict, and of a size that sometimes has substantial impact on the Company's reported results of operations for a period. Management uses these measures internally for planning, forecasting and evaluating the performances of the Company's businesses, including allocating resources and evaluating results relative to employee performance compensation targets. Unlike earnings from continuing operations before provision for taxes on income, net earnings from continuing operations, net earnings per share (diluted) from continuing operations, and effective tax rate from continuing operations prepared in accordance with GAAP, adjusted earnings from continuing operations before provision for taxes on income, adjusted net earnings from continuing operations, adjusted net earnings per share (diluted) from continuing operations, and adjusted effective tax rate from continuing operations may not be comparable with the calculation of similar measures for other companies. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of the Company's results of operations without including all events during a period, such as intangible asset amortization expense, significant gains from divestitures, the effects of an acquisition, restructuring, litigation, and changes in applicable laws and regulations (including significant accounting or tax matters) and do not provide a comparable view of the Company's performance to other companies in the health care industry. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP. |
| Johnson Johnson and Subsidiaries | |||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||
| First Quarter | |||||||||
| (Dollars in Millions Except Per Share Data) | 2024 | 2023 | |||||||
| Net Earnings (Loss) from Continuing Operations, after tax- as reported | $ | 3,255 | $ | (491) | |||||
| Pre-tax Adjustments | |||||||||
| Litigation related | 2,726 | 6,900 | |||||||
| Intangible Asset Amortization expense | 1,078 | 1,122 | |||||||
| COVID-19 Vaccine related costs 1 | 9 | 444 | |||||||
| Restructuring related 2 | 171 | 130 | |||||||
| Medical Device Regulation 3 | 51 | 64 | |||||||
| Acquisition, integration and divestiture related | 148 | 42 | |||||||
| (Gains) losses on securities | (20) | 72 | |||||||
| IPR D impairments | - | 49 | |||||||
| Tax Adjustments | |||||||||
| Tax impact on special item adjustments 4 | (856) | (1,980) | |||||||
| Tax legislation and other tax related | 18 | (12) | |||||||
| Adjusted Net Earnings from Continuing Operations, after tax | $ | 6,580 | $ | 6,340 | |||||
| Average shares outstanding (Diluted) | 2,430.1 | 2,634.3 | |||||||
| Adjusted net earnings per share from Continuing Operations (Diluted) | $ | 2.71 | $ | 2.41 | |||||
| Operational adjusted net earnings per share from Continuing Operations (Diluted) | $ | 2.72 | |||||||
| Notes | |||||||||
| 1 | COVID-19 Vaccine related costs include remaining commitments and obligations, including external manufacturing network exit costs and required clinical trial expenses, associated with the Company's completion of its COVID-19 vaccine contractual commitments. | ||||||||
| 2 | In fiscal 2023, the company completed a prioritization of its research and development (R D) investment within the Innovative Medicine segment to focus on the most promising medicines with the greatest benefit to patients. This resulted in the exit of certain programs within therapeutic areas. The R D program exits are primarily in infectious diseases and vaccines including the discontinuation of its respiratory syncytial virus (RSV) adult vaccine program, hepatitis and HIV development. The restructuring expenses of $144 million in the fiscal first quarter of 2024 and $130 million in the fiscal first quarter of 2023 include the termination of partnered and non-partnered program costs and asset impairments. In fiscal 2023, the company initiated a restructuring program of its Orthopaedics franchise within the MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The restructuring expenses of $27 million in the fiscal first quarter of 2024 primarily includes costs related to market and product exits. | ||||||||
| 3 | European Medical Device Regulation (MDR) costs represent one-time compliance costs for the Company's previously registered products. MDR is a replacement of the existing European Medical Devices Directive regulatory framework, and manufacturers of currently marketed medical devices were required to comply with EU MDR beginning in May 2021. The Company considers the adoption of EU MDR to be a significant one-time regulatory change and is not indicative of on-going operations. The Company has excluded only external third-party regulatory and consulting costs from its MedTech operating segments' measures of profit and loss used for making operating decisions and assessing performance which will be completed during 2024. | ||||||||
| 4 | The tax impact related to special item adjustments reflects the current and deferred income taxes associated with the above pre-tax special items in arriving at adjusted earnings. |
| Johnson Johnson and Subsidiaries | |||||||||||||||||||||||
| GAAP to Non-GAAP Reconciliation | |||||||||||||||||||||||
| $ in Millions | |||||||||||||||||||||||
| First Quarter March 31, 2024 GAAP | Intangible asset amortization | Litigation related | In-process research and development Impairments | Restructuring related | Acquisition, integration and divestiture related | (Loss) gain on securities | Medical Device Regulation | COVID-19 Vaccine Related Costs | Tax legislation and other tax related | First Quarter March 31, 2024 Non-GAAP | |||||||||||||
| Cost of products sold | $ | 6,511 | (1,078) | (7) | (20) | (2) | 5,404 | ||||||||||||||||
| Selling, marketing and admin expenses | 5,257 | (4) | 5,253 | ||||||||||||||||||||
| Research and development expense | 3,542 | (18) | (27) | (7) | 3,490 | ||||||||||||||||||
| Other (Income) Expense | 2,404 | (2,726) | (130) | 20 | (432) | ||||||||||||||||||
| Restructuring | 164 | (164) | - | ||||||||||||||||||||
| Provision for taxes on income | 459 | 148 | 627 | - | 39 | 38 | (7) | 9 | 2 | (18) | 1,297 | ||||||||||||
| Net Earnings from Continuing Operations | $ | 3,255 | 930 | 2,099 | - | 132 | 110 | (13) | 42 | 7 | 18 | 6,580 | |||||||||||
| First Quarter April 2, 2023 GAAP | Intangible asset amortization | Litigation related | In-process research and development Impairments | Restructuring related | Acquisition, integration and divestiture related | (Loss) gain on securities | Medical Device Regulation | COVID-19 Vaccine Related Costs | Tax legislation and other tax related | First Quarter April 2, 2023 Non-GAAP | |||||||||||||
| Cost of products sold | $ | 6,687 | (1,118) | (23) | (206) | 5,340 | |||||||||||||||||
| Selling, marketing and admin expenses | 4,906 | (7) | 4,899 | ||||||||||||||||||||
| Research and development expense | 3,455 | (16) | (34) | (16) | 3,389 | ||||||||||||||||||
| Other (Income) Expense | 6,940 | (4) | (6,900) | (26) | (72) | (222) | (284) | ||||||||||||||||
| In-process research and development Impairments | 49 | (49) | - | ||||||||||||||||||||
| Restructuring | 130 | (130) | - | ||||||||||||||||||||
| Provision for (Benefit from) taxes on income | (796) | 177 | 1,622 | 11 | 32 | 5 | 16 | 12 | 105 | 12 | 1,196 | ||||||||||||
| Net Earnings (Loss) from Continuing Operations | $ | (491) | 945 | 5,278 | 38 | 98 | 37 | 56 | 52 | 339 | (12) | 6,340 |
| Johnson Johnson and Subsidiaries | ||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
| Q1 YTD - Income Before Tax and Research Development Expense by Segment | ||||||||||||||||||||
| (Dollars in Millions) | ||||||||||||||||||||
| Innovative Medicine | MedTech | Unallocated | Worldwide Total | |||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Reported Income Before Tax by Segment from Continuing Operations | $ | 4,969 | 4,402 | 1,520 | 1,409 | (2,775) | (7,098) | 3,714 | (1,287) | |||||||||||
| % to Sales | 36.6% | 32.8% | 19.4% | 18.8% | (13.0)% | (34.0)% | 17.4 | % | (6.2) | % | ||||||||||
| Intangible asset amortization expense | 698 | 739 | 380 | 383 | - | - | 1,078 | 1,122 | ||||||||||||
| In-process research and development Impairments | - | - | - | 49 | - | - | - | 49 | ||||||||||||
| Litigation Related | - | - | - | - | 2,726 | 6,900 | 2,726 | 6,900 | ||||||||||||
| Loss (gain) on securities | (55) | 38 | 22 | 34 | 13 | - | (20) | 72 | ||||||||||||
| Restructuring related | 144 | 130 | 27 | - | - | - | 171 | 130 | ||||||||||||
| Acquisition, integration and divestiture related | 47 | - | 61 | 42 | 40 | - | 148 | 42 | ||||||||||||
| Medical Device Regulation | - | - | 51 | 64 | - | - | 51 | 64 | ||||||||||||
| COVID-19 Vaccine related costs | 9 | 444 | - | - | - | - | 9 | 444 | ||||||||||||
| Adjusted Income Before Tax by Segment from Continuing Operations | $ | 5,812 | 5,753 | 2,061 | 1,981 | 4 | (198) | 7,877 | 7,536 | |||||||||||
| % to Sales | 42.9 | % | 42.9 | % | 26.4 | % | 26.5 | % | 0.0 | % | (0.9) | % | 36.8 | % | 36.1 | % | ||||
| As Reported Research and development expense | $ | 2,896 | 2,778 | 646 | 677 | 3,542 | 3,455 | |||||||||||||
| % to Sales | 21.4 | % | 20.7 | % | 8.3 | % | 9.1 | % | 16.6 | % | 16.6 | % |