JnJ,
Q1 2019 - Results
1. PREVIOUS ANALYSES
I’ll start by reading my previous analysis so I can get in the “zone”…
Ok, it’s done. I’ve used the average growth rate for the last five years to make some estimates about the future earnings of each segment. The pharma business has grown at 7,5% yoy; the Medical Devices segment has grown at 1,6% yoy and the consumer business has lagged behind with negative growth.
Let’s see how things are evolving…
2. RESULTS
3. ANALYSIS
3.1. Revenue
Revenue has stayed flat at $20B. I think that if the company had wanted to keep this number flat on purpose, it wouldn’t be able to do it with such accuracy.
3.2. Net Income
Net income under GAAP measures has declined by 14%…
But the company doesn’t like GAAP measures so it provides us with its own adjustements.
If we take the adjusted net earnings, we can see that they were flat from 2018 first quarter.
Let’s now take a look at the three different segments.
3.3. Pharmaceutical
The “Pharmaceutical” segment, JnJ strongest segment, as grown by 4,1%. If we don’t take the foreign currency translation into account, this segment would’ve grown 7,9%. (5 year average growth is 7,5% so this is in line)
3.2. Medical Devices
The “Medical Devices” segment revenue has decreased by 4,6% mostly due to the foreign currency translation. If we don’t take the foreign currency effects into account, this segment would’ve decreased by -1%. (5 year average growth is 1,6% so this one is lagging behind)
3.3. Consumer
The “Consumer” segment revenue was down by -2,4%, again due to the foreign currency translation. If it wasn’t for that, this segment would’ve grown 2,2%. (5 year average growth is less than 0% so this one is a bit better than I would expect)
5.1. OVERVIEW & CONCLUSION
5. OVERVIEW
Johnson & Johnson still is one of the best companies out there but due to its size and predictability, it is hard to find any market inefficiencies here. At a PE of around 25 (GAAP) or 17 (non GAAP), this company isn’t exactly cheap.
As always, I’ll be following it from a far and I will read the quarterly results as they come out but I don’t think I’ll be writing about it again until the 2019 full year results are announced.
5.2. CONCLUSION
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