On January 22, 2025, Johnson & Johnson (JNJ, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year of 2024. Johnson & Johnson, the world's largest and most diverse healthcare firm, operates through its pharmaceutical and medical devices divisions, having divested its consumer business, Kenvue, in 2023. The company reported a 5.3% increase in fourth-quarter sales to $22.5 billion, surpassing the estimated revenue of $22,436.11 million. However, the reported earnings per share (EPS) of $1.41 fell short of the estimated $1.81. The adjusted EPS was $2.04.
Company Overview and Performance
Johnson & Johnson's pharmaceutical division focuses on therapeutic areas such as immunology, oncology, neurology, pulmonary, cardiology, and metabolic diseases. The company generates over half of its revenue from the United States. The fourth-quarter performance highlights a significant sales growth driven by its innovative medicine and MedTech segments, despite challenges in meeting EPS expectations.
Financial Achievements and Challenges
The company's reported sales growth of 5.3% in Q4 2024 reflects strong operational growth of 6.7% and adjusted operational growth of 5.7%. For the full year, Johnson & Johnson achieved a 4.3% increase in reported sales to $88.8 billion, with operational growth of 5.9% and adjusted operational growth of 5.4%. These achievements underscore the company's robust pipeline and strategic investments in innovation, crucial for maintaining its leadership in the drug manufacturing industry.
Income Statement Highlights
| Metric | Q4 2024 | Q4 2023 | % Change |
|---|---|---|---|
| Reported Sales | $22,520 million | $21,395 million | 5.3% |
| Net Earnings | $3,431 million | $4,132 million | (17.0)% |
| EPS (diluted) | $1.41 | $1.70 | (17.1)% |
| Adjusted EPS (diluted) | $2.04 | $2.29 | (10.9)% |
Analysis of Financial Metrics
The decline in net earnings and EPS is attributed to acquired in-process research and development (IPR&D) charges related to the V-Wave acquisition, impacting both the reported and adjusted EPS. Despite these challenges, the company's free cash flow increased to approximately $19,800 million, highlighting its strong cash generation capabilities.
Regional and Segment Performance
In the U.S., sales grew by 10.0% in Q4, while international sales saw a slight decline of 0.7%. The innovative medicine segment reported a 4.4% increase in sales, driven by key products in oncology and immunology. The MedTech segment experienced a 6.7% growth, supported by cardiovascular and general surgery products.
2024 was a transformative year for Johnson & Johnson, marked by strong growth, an accelerating pipeline and industry-leading investments in innovation," said Joaquin Duato, Chairman and Chief Executive Officer, Johnson & Johnson.
Conclusion
Johnson & Johnson's Q4 2024 results demonstrate robust revenue growth, although EPS fell short of expectations due to strategic investments and acquisitions. The company's focus on innovation and its strong financial foundation position it well for sustained growth in the healthcare industry. Investors and stakeholders will be keenly watching how the company navigates its challenges and capitalizes on its opportunities in the coming year.
Explore the complete 8-K earnings release (here) from Johnson & Johnson for further details.
