Executive Summary
Johnson & Johnson's Q1 2024 results showcase strong growth with revenue reaching $21.4 billion, a 3.9% increase driven by 7.8% growth in the U.S. market. The company's net income stood at $5.4 billion, translating to diluted earnings per share (EPS) of $2.20, up significantly from a loss per share of $0.19 in the prior year. The results reflect robust performance in both the Innovative Medicine and MedTech segments, aided by ongoing product launches, acquisitions, and the positive market reception of key therapies. Management's outlook remains bullish, emphasizing confidence in achieving operational sales growth of 5.5% to 6.0% for the fiscal year, indicating a strategic positioning for future growth.
Key Performance Indicators
QoQ: -19.61% | YoY:-36.72%
Key Insights
**Revenue and Growth:** Q1 2024 revenue was $21.4 billion, up 3.9% year-on-year, with a marked 7.8% growth in the U.S. Sales outside the U.S. showed a slight decline of 0.3%.
**Operating Income:** Operating income reached $6.3 billion, with a margin of 29.3%.
**Net Income:** The net income of $5.4 billion resulted in a net margin of 25.2%, showcasing strong profitability.
**EPS:** EPS of $2.20 marks a recovery from a loss a year earlier, reaffirming the company's profitability traject...
Financial Highlights
Revenue and Growth: Q1 2024 revenue was $21.4 billion, up 3.9% year-on-year, with a marked 7.8% growth in the U.S. Sales outside the U.S. showed a slight decline of 0.3%.
Operating Income: Operating income reached $6.3 billion, with a margin of 29.3%.
Net Income: The net income of $5.4 billion resulted in a net margin of 25.2%, showcasing strong profitability.
EPS: EPS of $2.20 marks a recovery from a loss a year earlier, reaffirming the company's profitability trajectory.
Cash and Debt: The company ended the quarter with $25.5 billion in cash and equivalents, maintaining a net debt position of $7.4 billion.
R&D Investment: Johnson & Johnson invested $3.5 billion in R&D, equating to 16.6% of sales and demonstrating its commitment to innovation.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
21.38B |
-0.63% |
-0.06% |
| Gross Profit |
14.87B |
-1.23% |
1.88% |
| Operating Income |
6.27B |
-1.34% |
36.16% |
| Net Income |
3.26B |
-36.72% |
-19.61% |
| EPS |
2.20 |
11.11% |
30.95% |
Key Financial Ratios
operatingProfitMargin
29.3%
operatingCashFlowPerShare
$1.52
freeCashFlowPerShare
$1.18
dividendPayoutRatio
88.1%
Management Commentary
Strategic Growth Initiatives:
- CEO Joaquin Duato highlighted that, 'We are entering 2024 in a position of strength,' with several significant regulatory and clinical milestones achieved.
- Management noted that the acquisition of Shockwave Medical will enhance their cardiovascular business and strengthen their strategic positioning in MedTech.
Product Performance:
- Innovative Medicine sales were strong, amounting to $13.6 billion with a notable 8.4% growth in the U.S. reflecting strong share gains and new product uptakes.
- MedTech segment sales increased by $7.8 billion, up 6.3%, indicating robust performance in the Electrophysiology business with a growth of 25.9%.
'We are pleased with our free cash flow generation in the first quarter of approximately $3 billion.' - Joe Wolk, CFO
â Joe Wolk
'Our investment strategy seeks to find technology that improves current standards of care...our M&A strategy looks for the long term.' - Joaquin Duato, CEO.
â Joaquin Duato
Forward Guidance
Management expects operational sales growth in the range of 5.5% to 6.0% for fiscal 2024, tightening guidance to a midpoint increase of $300 million. They anticipate the Innovative Medicine sector will drive growth ahead of the second half of the year, particularly as generic competition in immunology begins to emerge. The proactive steps taken in acquisitions indicate a tactical approach towards sustaining and expanding market share across segments.