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Johnson & Johnson Reports 2019 Second-Quarter Results
Jul 16, 2019
- Sales of $20.6 billion reflecting a decline of 1.3%, operational growth of 1.6%* and adjusted operational growth of 3.7%*
- EPS of $2.08 increased 43.4%; adjusted EPS of $2.58 increased 22.9%*; includes gain from sale of Advanced Sterilization Products (ASP) business
- Operational sales guidance increased due to strength of business; EPS guidance range maintained

NEW BRUNSWICK, N.J., July 16, 2019 /PRNewswire/ -- Johnson & Johnson (NYSE: JNJ) today announced results for second-quarter 2019. "We delivered solid second-quarter underlying sales growth and strong earnings growth that enables us to make investments in innovation to accelerate performance in each of our businesses," said Alex Gorsky, Chairman and Chief Executive Officer. "Our pipelines continue to progress with the launch of new products and several regulatory submissions and approvals, which positions us well to deliver the next wave of transformational products and solutions. I am proud of our talented colleagues across Johnson & Johnson who continue to deliver significant healthcare advances to improve the lives of patients and consumers around the world."

OVERALL FINANCIAL RESULTS:

 

SECOND QUARTER

 

($ in Millions, except EPS)

2019

2018

%  Change

Reported Sales

$       20,562

$       20,830

(1.3)%

Net Earnings

5,607

3,954

41.8%

EPS (diluted)

$           2.08

$           1.45

43.4%

       

Non-GAAP*

SECOND QUARTER

 

($ in Millions, except EPS)

2019

2018

%  Change

Operational Sales1,2

N/A

N/A

01.6%

Adjusted Operational Sales1,3

N/A

N/A

03.7%

Adjusted Net Earnings1,4

6,950

5,718

21.5%

Adjusted EPS (diluted)1,4

$           2.58

$           2.10

22.9%

1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules 

2 Excludes the impact of translational currency

3 Excludes the net impact of acquisitions and divestitures and translational currency

4 Excludes intangible amortization expense and special items

REGIONAL SALES RESULTS: 

 

SECOND QUARTER

%  Change

($ in Millions) 1

20192

20182

Reported2

Operational1,2

Currency2

Adjusted Operational1,3

U.S.

$       10,403

$       10,640

(2.2)%

(2.2)

-

0.0

International

10,159

10,190

(0.3)%

5.5

(5.8)

7.6

Worldwide

$       20,562

$       20,830

(1.3)%

1.6

(2.9)

3.7

1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules

2 Excludes the impact of translational currency

3 Excludes the net impact of acquisitions and divestitures and translational currency

Note: values may have been rounded

SEGMENT SALES RESULTS:

 

SECOND QUARTER

%  Change

($ in Millions) 1

20191

20181

Reported2

Operational1,2

Currency1

Adjusted Operational1,3

Consumer

$         3,544

$         3,504

1.2%

4.6

(3.4)

2.3

Pharmaceuticals

10,529

10,354

1.7%

4.4

(2.7)

4.4

Medical Devices

6,489

6,972

(6.9)%

(4.1)

(2.8)

3.2

Worldwide

$       20,562

$       20,830

(1.3)%

1.6

(2.9)

3.7

1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules

2 Excludes the impact of translational currency

3 Excludes the net impact of acquisitions and divestitures and translational currency

Note: values may have been rounded

SEGMENT COMMENTARY:

Consumer
Consumer worldwide operational sales, excluding the net impact of acquisitions and divestitures, grew 2.3%* driven by NEUTROGENA, AVEENO and OGX beauty products, over-the-counter products including ZYRTEC upper respiratory and MOTRIN analgesic products, international LISTERINE mouthwash in Oral Care products and U.S. Baby Care products.

Pharmaceutical
Pharmaceutical worldwide operational sales, excluding the net impact of acquisitions and divestitures grew 4.4%* driven by DARZALEX (daratumumab), for the treatment of multiple myeloma, STELARA (ustekinumab), a biologic for the treatment of  a number of immune-mediated inflammatory diseases, IMBRUVICA (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, a type of blood or lymph node cancer, INVEGA SUSTENNA/XEPLION/INVEGA TRINZA/TREVICTA (paliperidone palmitate), long-acting, injectable atypical antipsychotics for the treatment of schizophrenia in adults, TREMFYA (guselkumab),  a biologic for the treatment of adults living with moderate to severe plaque psoriasis, OPSUMIT (macitentan), an oral endothelin receptor antagonist indicated for the treatment of pulmonary arterial hypertension to delay disease progression, ERLEADA (apalutamide), a next-generation androgen receptor inhibitor for the treatment of patients with non-metastatic castration-resistant prostate cancer and  PREZISTA/PREZCOBIX/REZOLSTA/ SYMTUZA (D/C/F/TAF) for the treatment of human immunodeficiency virus type 1 (HIV-1) infection, partially offset by declines in REMICADE (infliximab), a biologic approved for the treatment of a number of immune-mediated inflammatory diseases, and U.S. ZYTIGA (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer due to biosimilar and generic entrants.

Medical Devices
Worldwide Medical Devices operational sales, excluding the net impact of acquisitions and divestitures grew 3.2%* driven by the growth of electrophysiology products in the Interventional Solutions business, endocutters and international energy products in the Advanced Surgery business. As previously disclosed, the divestiture of the ASP business was completed, resulting in an approximate $2.0 billion pretax gain in the quarter.

NOTABLE NEW ANNOUNCEMENTS IN THE QUARTER:

The information contained in this section should be read in conjunction with Johnson & Johnson's other disclosures filed with the Securities and Exchange Commission, including its Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. Copies of these filings are available online at www.sec.gov, www.jnj.com or on request from Johnson & Johnson. The reader is also encouraged to review all other news releases available online in the Investors section of the company's website at news releases.

Pipeline Updates

Regulatory Approvals

IMBRUVICA (ibrutinib) – CHMP Positive Opinions in combination with obinutuzumab in CLL and in combination with rituximab in WM

(press release)

DARZALEX (daratumumab) – Newly diagnosed patients with Multiple Myeloma in combination with Lenalidomide and Dexamethasone (U.S.)

(press release)

Regulatory Submissions

DARZALEX (daratumumab) – Subcutaneous formulation in multiple myeloma (U.S.)1

(press release)

ERLEADA (apalutamide) - Metastatic Hormone-Sensitive Prostate Cancer (EU)

(press release)

ERLEADA (apalutamide) – Metastatic Castration - Sensitive Prostate Cancer (U.S)

(press release)

Rilpivirine and Cabotegravir - Monthly, Injectable, Two-Drug Regimen for Treatment of HIV

(press release)

1 Subsequent to the quarter

FULL YEAR 2019 GUIDANCE:

Johnson & Johnson does not provide GAAP financial measures on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments without unreasonable effort. These items are uncertain, depend on various factors, and could be material to Johnson & Johnson's results computed in accordance with GAAP.

 

July 2019

April 2019

($ in Billions, except EPS)

   

Adjusted Operational Sales1,2

Change vs. Prior Year

3.2% - 3.7%

2.5% - 3.5%

Operational Sales2

Change vs. Prior Year

$82.4 to $83.2

1.0% - 2.0%

$82.0 to $82.8

0.5% - 1.5%

Estimated Reported Sales3

Change vs. Prior Year

$80.8 to $81.6

(1.0%) - 0.0%

$80.4 to $81.2

(1.5%) - (0.5%)

     

Adjusted Operational EPS (Diluted)2,4

Change vs. Prior Year

$8.73 to $8.83

6.7% - 7.9%

$8.73 to $8.83

6.7% - 7.9%

Adjusted EPS (Diluted)3,4

Change vs. Prior Year

$8.53 to $8.63

4.3% - 5.5%

$8.53 to $8.63

4.3% - 5.5%

1 Non-GAAP financial measure; excludes the net impact of acquisitions and divestitures

2 Non-GAAP financial measure; excludes the impact of translational currency

3 Calculated using Euro Average Rate: July 2019 = $1.12; Euro Average Rate: April 2019 = $1.12 (Illustrative purposes only)

4 Non-GAAP financial measure; excludes intangible amortization expense and special items

Other modeling considerations will be provided on the webcast.

WEBCAST INFORMATION:
Johnson & Johnson will conduct a conference call with investors to discuss this earnings release today at 8:30 a.m., Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Johnson & Johnson website. A replay and podcast will be available approximately two hours after the live webcast in the Investors section of the company's website at events-and-presentations

ABOUT JOHNSON & JOHNSON:
At Johnson & Johnson, we believe good health is the foundation of vibrant lives, thriving communities and forward progress. That's why for more than 130 years, we have aimed to keep people well at every age and every stage of life. Today, as the world's largest and most broadly-based health care company, we are committed to using our reach and size for good. We strive to improve access and affordability, create healthier communities, and put a healthy mind, body and environment within reach of everyone, everywhere. We are blending our heart, science and ingenuity to profoundly change the trajectory of health for humanity. 

NON-GAAP FINANCIAL MEASURES:
*Operational sales growth excluding the impact of translational currency, adjusted operational sales growth excluding the net impact of acquisitions and divestitures and translational currency, as well as adjusted net earnings, adjusted diluted earnings per share and adjusted operational diluted earnings per share excluding after-tax intangible amortization expense and special items, are non-GAAP financial measures and should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Except for guidance measures, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investors section of the company's website at quarterly-results.

Copies of the financial schedules accompanying this earnings release are available on the company's website at quarterly-results. These schedules include supplementary sales data, a condensed consolidated statement of earnings, reconciliations of non-GAAP financial measures, and sales of key products/franchises. Additional information on Johnson & Johnson, including adjusted income before tax by segment, a pharmaceutical pipeline of selected compounds in late stage development and a copy of today's earnings call presentation can also be found in the Investors section of the company's website at quarterly-results.

NOTE TO INVESTORS CONCERNING FORWARD-LOOKING STATEMENTS:
This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws and regulations, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 30, 2018, including in the sections captioned "Cautionary Note Regarding Forward-Looking Statements" and "Item 1A. Risk Factors," in the company's most recently filed Quarterly Report on Form 10-Q and the company's subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.com or on request from Johnson & Johnson. Any forward-looking statement made in this release speaks only as of the date of this release. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.

Johnson & Johnson and Subsidiaries

                                     

Supplementary Sales Data

                                     
                                       

(Unaudited; Dollars in Millions)

SECOND QUARTER

 

SIX MONTHS

         

Percent Change

         

Percent Change

 

2019

 

2018

 

Total

 

Operations

 

Currency

 

2019

 

2018

 

Total

 

Operations

 

Currency

Sales to customers by

                                     

segment of business

                                     
                                       

Consumer

                                     

    U.S.

$   1,537

 

1,476

 

4.1

%

4.1

 

-

 

$   2,975

 

2,912

 

2.2

%

2.2

 

-

    International

2,007

 

2,028

 

(1.0)

 

4.9

 

(5.9)

 

3,887

 

3,990

 

(2.6)

 

4.3

 

(6.9)

 

3,544

 

3,504

 

1.2

 

4.6

 

(3.4)

 

6,862

 

6,902

 

(0.6)

 

3.4

 

(4.0)

                                       

Pharmaceutical

                                     

    U.S.

5,783

 

5,899

 

(2.0)

 

(2.0)

 

-

 

11,365

 

11,253

 

1.0

 

1.0

 

-

    International

4,746

 

4,455

 

6.5

 

12.9

 

(6.4)

 

9,408

 

8,945

 

5.2

 

12.5

 

(7.3)

 

10,529

 

10,354

 

1.7

 

4.4

 

(2.7)

 

20,773

 

20,198

 

2.8

 

6.1

 

(3.3)

                                       

Medical Devices

                                     

    U.S.

3,083

 

3,265

 

(5.6)

 

(5.6)

 

-

 

6,192

 

6,426

 

(3.6)

 

(3.6)

 

-

    International

3,406

 

3,707

 

(8.1)

 

(2.9)

 

(5.2)

 

6,756

 

7,313

 

(7.6)

 

(1.6)

 

(6.0)

 

6,489

 

6,972

 

(6.9)

 

(4.1)

 

(2.8)

 

12,948

 

13,739

 

(5.7)

 

(2.6)

 

(3.1)

                                       

U.S.

10,403

 

10,640

 

(2.2)

 

(2.2)

 

-

 

20,532

 

20,591

 

(0.3)

 

(0.3)

 

-

International

10,159

 

10,190

 

(0.3)

 

5.5

 

(5.8)

 

20,051

 

20,248

 

(1.0)

 

5.8

 

(6.8)

Worldwide

$ 20,562

 

20,830

 

(1.3)

%

1.6

 

(2.9)

 

$ 40,583

 

40,839

 

(0.6)

%

2.7

 

(3.3)

                                       

Note: Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely.

                 

 

Johnson & Johnson and Subsidiaries

                                     

Supplementary Sales Data

                                     
                                       

(Unaudited; Dollars in Millions)

SECOND QUARTER

 

SIX MONTHS

         

Percent Change

         

Percent Change

 

2019

 

2018

 

Total

 

Operations

 

Currency

 

2019

 

2018

 

Total

 

Operations

 

Currency

Sales to customers by

                                     

geographic area

                                     
                                       

U.S.

$ 10,403

 

10,640

 

(2.2)

%

(2.2)

 

-

 

$ 20,532

 

20,591

 

(0.3)

%

(0.3)

 

-

                                       

Europe

4,733

 

4,810

 

(1.6)

 

4.7

 

(6.3)

 

9,342

 

9,607

 

(2.8)

 

4.6

 

(7.4)

Western Hemisphere excluding U.S.

1,455

 

1,540

 

(5.5)

 

4.2

 

(9.7)

 

2,958

 

3,107

 

(4.8)

 

6.5

 

(11.3)

Asia-Pacific, Africa

3,971

 

3,840

 

3.4

 

7.2

 

(3.8)

 

7,751

 

7,534

 

2.9

 

7.0

 

(4.1)

International

10,159

 

10,190

 

(0.3)

 

5.5

 

(5.8)

 

20,051

 

20,248

 

(1.0)

 

5.8

 

(6.8)

                                       

Worldwide

$ 20,562

 

20,830

 

(1.3)

%

1.6

 

(2.9)

 

$ 40,583

 

40,839

 

(0.6)

%

2.7

 

(3.3)

                                       

Note: Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely.

               

 

Johnson & Johnson and Subsidiaries

                 

Condensed Consolidated Statement of Earnings 

                 
                   

(Unaudited; in Millions Except Per Share Figures)

SECOND QUARTER

                   
 

2019

 

2018

 

Percent

     

Percent

     

Percent

 

Increase

 

Amount

 

to Sales

 

Amount

 

to Sales

 

(Decrease)

Sales to customers

$    20,562

 

100.0

 

$    20,830

 

100.0

 

(1.3)

Cost of products sold

6,940

 

33.8

 

6,927

 

33.3

 

0.2

Gross Profit

13,622

 

66.2

 

13,903

 

66.7

 

(2.0)

Selling, marketing and administrative expenses

5,546

 

27.0

 

5,743

 

27.5

 

(3.4)

Research and development expense

2,666

 

13.0

 

2,639

 

12.7

 

1.0

Interest (income) expense, net

(5)

 

0.0

 

127

 

0.6

   

Other (income) expense, net

(1,683)

 

(8.2)

 

364

 

1.7

   

Restructuring

57

 

0.2

 

57

 

0.3

   

Earnings before provision for taxes on income

7,041

 

34.2

 

4,973

 

23.9

 

41.6

Provision for taxes on income

1,434

 

6.9

 

1,019

 

4.9

 

40.7

Net earnings

$      5,607

 

27.3

 

$      3,954

 

19.0

 

41.8

                   

Net earnings per share (Diluted)

$        2.08

     

$        1.45

     

43.4

                   

Average shares outstanding (Diluted)

2,691.7

     

2,721.3

       
                   

Effective tax rate

20.4

%

   

20.5

%

     
                   

Adjusted earnings before provision for taxes and net earnings (1)

                 

Earnings before provision for taxes on income

$      8,614

 

41.9

 

$      7,014

 

33.7

 

22.8

Net earnings

$      6,950

 

33.8

 

$      5,718

 

27.5

 

21.5

Net earnings per share (Diluted)

$        2.58

     

$        2.10

     

22.9

Effective tax rate

19.3

%

   

18.5

%

     
                   

(1) See Reconciliation of Non-GAAP Financial Measures.

                 

 

Johnson & Johnson and Subsidiaries

                 

Condensed Consolidated Statement of Earnings 

                 
                   

(Unaudited; in Millions Except Per Share Figures)

SIX MONTHS

                   
 

2019

 

2018

 

Percent

     

Percent

     

Percent

 

Increase

 

Amount

 

to Sales

 

Amount

 

to Sales

 

(Decrease)

Sales to customers

$    40,583

 

100.0

 

$    40,839

 

100.0

 

(0.6)

Cost of products sold

13,555

 

33.4

 

13,541

 

33.2

 

0.1

Gross Profit

27,028

 

66.6

 

27,298

 

66.8

 

(1.0)

Selling, marketing and administrative expenses

10,765

 

26.5

 

11,006

 

27.0

 

(2.2)

Research and development expense

5,524

 

13.6

 

5,043

 

12.3

 

9.5

In-process research and development

890

 

2.2

 

-

 

-

   

Interest (income) expense, net

(2)

 

0.0

 

272

 

0.7

   

Other (income) expense, net

(1,705)

 

(4.2)

 

424

 

1.0

   

Restructuring

93

 

0.3

 

99

 

0.2

   

Earnings before provision for taxes on income

11,463

 

28.2

 

10,454

 

25.6

 

9.7

Provision for taxes on income

2,107

 

5.1

 

2,133

 

5.2

 

(1.2)

Net earnings

$      9,356

 

23.1

 

$      8,321

 

20.4

 

12.4

                   

Net earnings per share (Diluted)

$        3.47

     

$        3.05

     

13.8

                   

Average shares outstanding (Diluted)

2,697.0

     

2,728.5

       
                   

Effective tax rate

18.4

%

   

20.4

%

     
                   

Adjusted earnings before provision for taxes and net earnings (1)

                 

Earnings before provision for taxes on income

$    15,481

 

38.1

 

$    13,872

 

34.0

 

11.6

Net earnings

$    12,611

 

31.1

 

$    11,353

 

27.8

 

11.1

Net earnings per share (Diluted)

$        4.68

     

$        4.16

     

12.5

Effective tax rate

18.5

%

   

18.2

%

     
                   

(1) See Reconciliation of Non-GAAP Financial Measures.

                 

 

Johnson & Johnson and Subsidiaries

                             

Reconciliation of Non-GAAP Financial Measures

                             
     

Second Quarter

 

% Incr. /

   

Six Months YTD

 

% Incr. /

 

(Dollars in Millions Except Per Share Data)

   

2019

 

2018

 

(Decr.)

   

2019

 

2018

 

(Decr.)

 
                               

Earnings before provision for taxes on income - as reported

   

$      7,041

 

4,973

 

41.6

%

 

$    11,463

 

10,454

 

9.7

%

Intangible asset amortization expense

   

1,118

 

1,084

       

2,248

 

2,199

     

In-process research and development

   

-

 

-

       

890

 

-

     

Litigation expense, net

   

409

 

703

       

832

 

703

     

Restructuring/Other (1)

   

142

 

176

       

232

 

283

     

Actelion acquisition related cost

   

51

 

64

       

90

 

160

     

AMO acquisition related cost

   

13

 

25

       

41

 

46

     

Auris Health acquisition related

   

(9)

 

-

       

(9)

 

-

     

Unrealized loss/(gain) on securities

   

(148)

 

(39)

       

(306)

 

(12)

     

Diabetes asset impairment

   

-

 

4

       

-

 

4

     

Other

   

(3)

 

24

       

-

 

35

     

Earnings before provision for taxes on income - as adjusted

   

$      8,614

 

7,014

 

22.8

%

 

$    15,481

 

13,872

 

11.6

%

                               

Net Earnings - as reported

   

$      5,607

 

3,954

 

41.8

%

 

$      9,356

 

8,321

 

12.4

%

Intangible asset amortization expense

   

979

 

967

       

1,825

 

1,963

     

In-process research and development

   

-

 

-

       

703

 

-

     

Litigation expense, net

   

342

 

609

       

684

 

609

     

Restructuring/Other

   

116

 

152

       

191

 

233

     

Actelion acquisition related cost

   

47

 

64

       

84

 

156

     

AMO acquisition related cost

   

10

 

22

       

33

 

39

     

Auris Health acquisition related

   

(7)

 

-

       

(7)

 

-

     

Unrealized loss/(gain) on securities

   

(117)

 

(31)

       

(242)

 

(10)

     

Diabetes asset impairment

   

-

 

3

       

-

 

3

     

Impact of tax legislation (2)

   

-

 

(40)

       

-

 

12

     

Other

   

(27)

 

18

       

(16)

 

27

     

Net Earnings - as adjusted 

   

$      6,950

 

5,718

 

21.5

%

 

$    12,611

 

11,353

 

11.1

%

                               

Diluted Net Earnings per share - as reported

   

$        2.08

 

1.45

 

43.4

%

 

$        3.47

 

3.05

 

13.8

%

Intangible asset amortization expense

   

0.36

 

0.36

       

0.68

 

0.72

     

In-process research and development

   

-

 

-

       

0.26

 

-

     

Litigation expense, net

   

0.13

 

0.22

       

0.26

 

0.22

     

Restructuring/Other

   

0.04

 

0.06

       

0.07

 

0.09

     

Actelion acquisition related cost

   

0.02

 

0.02

       

0.03

 

0.05

     

AMO acquisition related cost

   

-

 

0.01

       

0.01

 

0.01

     

Auris Health acquisition related

   

-

 

-

       

-

 

-

     

Unrealized loss/(gain) on securities

   

(0.04)

 

(0.01)

       

(0.09)

 

-

     

Diabetes asset impairment

   

-

 

-

       

-

 

-

     

Impact of tax legislation

   

-

 

(0.02)

       

-

 

0.01

     

Other

   

(0.01)

 

0.01

       

(0.01)

 

0.01

     

Diluted Net Earnings per share - as adjusted 

   

$        2.58

 

2.10

 

22.9

%

 

$        4.68

 

4.16

 

12.5

%

                               

Operational Diluted Net Earnings per share - as adjusted 

                             

at 2017 foreign currency exchange rates

       

2.04

           

3.97

     
                               

Impact of currency at 2018 foreign currency exchange rates

   

0.05

 

0.06

       

0.13

 

0.19

     
                               

Operational Diluted Net Earnings per share - as adjusted 

                             

at 2018 foreign currency exchange rates

   

$        2.63

 

2.10

 

25.2

%

 

$        4.81

 

4.16

 

15.6

%

                               

(1)Includes $38M recorded in cost of products sold and $47M recorded in other (income) expense for the second quarter 2019. Includes $61M recorded in cost of products sold

and $78M recorded in other (income) expense for six months 2019 YTD.  Includes $44M recorded in cost of products sold and $75M recorded in other (income) expense for the 

second quarter 2018.  Includes $50M recorded in cost of products sold and $134M recorded in other (income) expense for six months 2018 YTD.

                               

(2)Includes foreign currency translation

                             

 

Johnson & Johnson and Subsidiaries

               

Reconciliation of Non-GAAP Financial Measure

               
                 

Adjusted Operational Sales Growth

 SECOND QUARTER 2019 ACTUAL vs. 2018 ACTUAL 

                 
 

 Segments 

                 
   

 Consumer 

 

 Pharmaceutical 

 

 Medical Devices 

 

 Total 

 WW As Reported 

 

1.2%

 

1.7%

 

(6.9)%

 

(1.3)%

 U.S. 

 

4.1%

 

(2.0)%

 

(5.6)%

 

(2.2)%

 International 

 

(1.0)%

 

6.5%

 

(8.1)%

 

(0.3)%

                 

 WW Currency 

 

(3.4)

 

(2.7)

 

(2.8)

 

(2.9)

 U.S. 

 

-

 

-

 

-

 

-

 International 

 

(5.9)

 

(6.4)

 

(5.2)

 

(5.8)

                 

 WW Operational 

 

4.6%

 

4.4%

 

(4.1)%

 

1.6%

 U.S. 

 

4.1%

 

(2.0)%

 

(5.6)%

 

(2.2)%

 International 

 

4.9%

 

12.9%

 

(2.9)%

 

5.5%

                 

Beauty

               

Nizoral

 

0.6

         

0.1

 U.S. 

 

0.3

         

0.0

 International 

 

0.7

         

0.1

                 

OTC

               

Zarbees

 

(0.6)

         

(0.1)

 U.S. 

 

(1.4)

         

(0.2)

 International 

 

0.0

         

0.0

                 

Diabetes Care

               

LifeScan

         

5.1

 

1.7

 U.S. 

         

4.0

 

1.2

 International 

         

6.2

 

2.3

                 

Beauty

               

RoC

 

0.7

         

0.1

 U.S. 

 

1.3

         

0.2

 International 

 

0.3

         

0.1

                 

Beauty

               

Dr. Ci Labo - Japan

 

(3.0)

         

(0.5)

 U.S. 

 

0.0

         

0.0

 International 

 

(5.2)

         

(1.0)

                 

Specialty Surgery

               

Advanced Sterilization Products

         

2.0

 

0.7

 U.S. 

         

3.0

 

0.9

 International 

         

1.2

 

0.5

                 

All Other Acquisitions and Divestitures

 

0.0

 

0.0

 

0.1

 

0.0

 U.S. 

 

0.0

 

0.0

 

0.1

 

0.0

 International 

 

0.1

 

0.0

 

0.1

 

0.0

                 

WW Adjusted Operational

 

2.3%

 

4.4%

 

3.2%

 

3.7%

 U.S. 

 

4.4%

 

(2.0)%

 

1.6%

 

0.0%

 International 

 

0.7%

 

12.9%

 

4.7%

 

7.6%

                 

Note: Percentages are based on actual, non-rounded figures and may not sum

   

 

Johnson & Johnson and Subsidiaries

               

Reconciliation of Non-GAAP Financial Measure

               
                 

Adjusted Operational Sales Growth

 SIX MONTHS 2019 ACTUAL vs. 2018 ACTUAL 

                 
 

 Segments 

                 
   

 Consumer 

 

 Pharmaceutical 

 

 Medical Devices 

 

 Total 

 WW As Reported 

 

(0.6)%

 

2.8%

 

(5.7)%

 

(0.6)%

 U.S. 

 

2.2%

 

1.0%

 

(3.6)%

 

(0.3)%

 International 

 

(2.6)%

 

5.2%

 

(7.6)%

 

(1.0)%

                 

 WW Currency 

 

(4.0)

 

(3.3)

 

(3.1)

 

(3.3)

 U.S. 

 

-

 

-

 

-

 

-

 International 

 

(6.9)

 

(7.3)

 

(6.0)

 

(6.8)

                 

 WW Operational 

 

3.4%

 

6.1%

 

(2.6)%

 

2.7%

 U.S. 

 

2.2%

 

1.0%

 

(3.6)%

 

(0.3)%

 International 

 

4.3%

 

12.5%

 

(1.6)%

 

5.8%

                 

Beauty

               

Nizoral

 

0.5

         

0.1

 U.S. 

 

0.3

         

0.0

 International 

 

0.6

         

0.1

                 

OTC

               

Zarbees

 

(0.7)

         

(0.1)

 U.S. 

 

(1.7)

         

(0.2)

 International 

 

0.0

         

0.0

                 

Diabetes Care

               

LifeScan

         

5.1

 

1.7

 U.S. 

         

3.9

 

1.2

 International 

         

6.1

 

2.3

                 

Beauty

               

RoC

 

0.8

         

0.1

 U.S. 

 

1.4

         

0.2

 International 

 

0.3

         

0.1

                 

Beauty

               

Dr. Ci Labo - Japan

 

(2.6)

         

(0.4)

 U.S. 

 

0.0

         

0.0

 International 

 

(4.4)

         

(0.9)

                 

Specialty Surgery

               

Advanced Sterilization Products

         

1.1

 

0.4

 U.S. 

         

1.5

 

0.5

 International 

         

0.6

 

0.2

                 

All Other Acquisitions and Divestitures

 

0.1

 

0.0

 

0.1

 

0.1

 U.S. 

 

0.0

 

0.0

 

0.2

 

0.1

 International 

 

0.2

 

0.0

 

0.1

 

0.1

                 

WW Adjusted Operational

 

1.5%

 

6.1%

 

3.8%

 

4.6%

 U.S. 

 

2.2%

 

1.0%

 

2.1%

 

1.5%

 International 

 

1.0%

 

12.5%

 

5.3%

 

7.7%

                 

Note: Percentages are based on actual, non-rounded figures and may not sum

   

 

 

REPORTED SALES vs. PRIOR PERIOD ($MM)

 

SECOND QUARTER

 

SIX MONTHS

         

% Change

         

% Change

   

2019

 

2018

Reported

Operational (1)

Currency

   

2019

 

2018

Reported

Operational (1)

Currency

CONSUMER SEGMENT (2) 

                             

BABY CARE

                             

US

 

$            99

 

89

11.5%

11.5%

-

   

$          186

 

186

-0.2%

-0.2%

-

Intl

 

344

 

367

-6.3%

0.0%

-6.3%

   

651

 

727

-10.5%

-3.2%

-7.3%

WW

 

443

 

456

-2.8%

2.2%

-5.0%

   

837

 

913

-8.4%

-2.6%

-5.8%

BEAUTY

                             

US

 

663

 

637

4.1%

4.1%

-

   

1,251

 

1,248

0.3%

0.3%

-

Intl

 

539

 

472

14.1%

19.5%

-5.4%

   

1,041

 

945

10.1%

16.3%

-6.2%

WW

 

1,202

 

1,109

8.4%

10.7%

-2.3%

   

2,292

 

2,193

4.5%

7.2%

-2.7%

ORAL CARE

                             

US

 

155

 

157

-1.6%

-1.6%

-

   

306

 

314

-2.5%

-2.5%

-

Intl

 

234

 

236

-0.7%

5.3%

-6.0%

   

450

 

458

-1.7%

4.9%

-6.6%

WW

 

389

 

393

-1.1%

2.5%

-3.6%

   

756

 

772

-2.0%

1.9%

-3.9%

OTC

                             

US

 

484

 

454

6.6%

6.6%

-

   

991

 

919

7.8%

7.8%

-

Intl

 

580

 

612

-5.1%

0.0%

-5.1%

   

1,160

 

1,219

-4.9%

1.4%

-6.3%

WW

 

1,064

 

1,066

-0.1%

2.8%

-2.9%

   

2,151

 

2,138

0.6%

4.2%

-3.6%

WOMEN'S HEALTH

                             

US

 

3

 

4

-10.3%

-10.3%

-

   

6

 

7

-3.7%

-3.7%

-

Intl

 

250

 

276

-9.5%

-1.3%

-8.2%

   

472

 

516

-8.6%

1.3%

-9.9%

WW

 

253

 

280

-9.5%

-1.4%

-8.1%

   

478

 

523

-8.5%

1.2%

-9.7%

WOUND CARE / OTHER

                             

US

 

132

 

135

-1.9%

-1.9%

-

   

234

 

238

-1.5%

-1.5%

-

Intl

 

61

 

65

-6.4%

-2.0%

-4.4%

   

114

 

125