Net earnings and diluted earnings per share for the first quarter of 2014 were
"
The Company increased its earnings guidance for full-year 2014 to
Worldwide Consumer sales of
Domestic sales decreased 2.9% reflecting the divestiture of the sanitary protection business that was completed in
Positive contributors to operational results were sales of AVEENO® and DABAO® skin care products; international sales of LISTERINE® oral care products; and U.S. sales of ZYRTEC®, an over-the-counter allergy treatment.
Worldwide Pharmaceutical sales of
Primary contributors to operational sales growth were STELARA® (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis and psoriatic arthritis; INVEGA® SUSTENNA®/XEPLION® (paliperidone palmitate), a once-monthly, long-acting, injectable atypical antipsychotic for the treatment of schizophrenia in adults; PREZISTA® (darunavir), a treatment for HIV; VELCADE® (bortezomib), a treatment for multiple myeloma; and sales of new products.
The strong sales results of new products include OLYSIOTM/SOVRIADTM (simeprevir), for combination treatment of chronic hepatitis C in adult patients; ZYTIGA® (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer; XARELTO® (rivaroxaban), an oral anticoagulant; and INVOKANA®(canagliflozin) for the treatment of adults with type 2 diabetes.
Sales results were negatively impacted by loss of exclusivity for ACIPHEX® (rabeprazole), a proton pump inhibitor for gastrointestinal disorders and CONCERTA® (methylphenidate HCI) for the treatment of attention deficit hyperactivity disorder.
During the quarter, the
Also during the quarter, the
In addition, a New Drug Application was submitted to the
Worldwide Medical Devices and Diagnostics sales of
Primary contributors to operational growth were sales of products in the Orthopaedics business; the Specialty Surgery business; and
Sales results in the U.S. Diabetes Care business were negatively impacted by price declines associated with the implementation of
During the quarter, the
Also during the quarter, a binding offer was accepted from The Carlyle Group to acquire the
About
Caring for the world, one person at a time, inspires and unites the people of
* Net earnings and diluted earnings per share excluding 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. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the financial schedules accompanying this press release and can be found in the Investor Relations section of the Company's website at www.investor.jnj.com.
Copies of the financial schedules accompanying this press release are available at www.investor.jnj.com/historical-sales.cfm. These schedules include supplementary sales data, a condensed consolidated statement of earnings, reconciliation of non-GAAP financial measures, and sales of key products/franchises. Additional information on
NOTE TO INVESTORS
(This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. 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
|
|||||||||
Supplementary Sales Data |
|||||||||
(Unaudited; Dollars in Millions) |
FIRST QUARTER |
||||||||
Percent Change |
|||||||||
2014 |
2013 |
Total |
Operations |
Currency |
|||||
Sales to customers by |
|||||||||
segment of business |
|||||||||
Consumer |
|||||||||
U.S. |
$ 1,309 |
1,348 |
(2.9) |
% |
(2.9) |
- |
|||
International |
2,248 |
2,327 |
(3.4) |
0.7 |
(4.1) |
||||
3,557 |
3,675 |
(3.2) |
(0.6) |
(2.6) |
|||||
Pharmaceutical |
|||||||||
U.S. |
3,740 |
3,471 |
7.7 |
7.7 |
- |
||||
International |
3,758 |
3,297 |
14.0 |
16.9 |
(2.9) |
||||
7,498 |
6,768 |
10.8 |
12.2 |
(1.4) |
|||||
Med Devices & Diagnostics |
|||||||||
U.S. |
3,155 |
3,206 |
(1.6) |
(1.6) |
- |
||||
International |
3,905 |
3,856 |
1.3 |
4.6 |
(3.3) |
||||
7,060 |
7,062 |
0.0 |
1.8 |
(1.8) |
|||||
U.S. |
8,204 |
8,025 |
2.2 |
2.2 |
- |
||||
International |
9,911 |
9,480 |
4.5 |
7.9 |
(3.4) |
||||
Worldwide |
$ 18,115 |
17,505 |
3.5 |
% |
5.3 |
(1.8) |
|
|||||||||
Supplementary Sales Data |
|||||||||
(Unaudited; Dollars in Millions) |
FIRST QUARTER |
||||||||
Percent Change |
|||||||||
2014 |
2013 |
Total |
Operations |
Currency |
|||||
Sales to customers by |
|||||||||
geographic area |
|||||||||
U.S. |
$ 8,204 |
8,025 |
2.2 |
% |
2.2 |
- |
|||
Europe |
4,885 |
4,481 |
9.0 |
6.6 |
2.4 |
||||
Western Hemisphere excluding U.S. |
1,695 |
1,783 |
(4.9) |
7.1 |
(12.0) |
||||
|
3,331 |
3,216 |
3.6 |
10.3 |
(6.7) |
||||
International |
9,911 |
9,480 |
4.5 |
7.9 |
(3.4) |
||||
Worldwide |
$ 18,115 |
17,505 |
3.5 |
% |
5.3 |
(1.8) |
|
|||||||||
Condensed Consolidated Statement of Earnings |
|||||||||
(Unaudited; in Millions Except Per Share Figures) |
FIRST QUARTER |
||||||||
2014 |
2013 |
Percent |
|||||||
Percent |
Percent |
Increase |
|||||||
Amount |
to Sales |
Amount |
to Sales |
(Decrease) |
|||||
Sales to customers |
$ 18,115 |
100.0 |
$ 17,505 |
100.0 |
3.5 |
||||
Cost of products sold |
5,455 |
30.1 |
5,554 |
31.7 |
(1.8) |
||||
Selling, marketing and administrative expenses |
5,183 |
28.6 |
5,223 |
29.8 |
(0.8) |
||||
Research and development expense |
1,831 |
10.1 |
1,784 |
10.2 |
2.6 |
||||
In-process research and development |
18 |
0.1 |
64 |
0.4 |
|||||
Interest (income) expense, net |
118 |
0.7 |
104 |
0.6 |
|||||
Other (income) expense, net |
86 |
0.5 |
515 |
3.0 |
|||||
Earnings before provision for taxes on income |
5,424 |
29.9 |
4,261 |
24.3 |
27.3 |
||||
Provision for taxes on income |
697 |
3.8 |
764 |
4.3 |
(8.8) |
||||
Net earnings |
$ 4,727 |
26.1 |
$ 3,497 |
20.0 |
35.2 |
||||
Net earnings per share (Diluted) |
$ 1.64 |
$ 1.22 |
34.4 |
||||||
Average shares outstanding (Diluted) |
2,874.7 |
2,858.8 |
|||||||
Effective tax rate |
12.9 |
% |
17.9 |
% |
|||||
Adjusted earnings before provision for taxes and net earnings (1) |
|||||||||
Earnings before provision for taxes on income |
$ 5,560 |
30.7 |
$ 5,070 |
29.0 |
9.7 |
||||
Net earnings |
$ 4,426 |
24.4 |
$ 4,107 |
23.5 |
7.8 |
||||
Net earnings per share (Diluted) |
$ 1.54 |
$ 1.44 |
6.9 |
||||||
Effective tax rate |
20.4 |
% |
19.0 |
% |
|||||
(1) See Reconciliation of Non-GAAP Financial Measures. |
|
|||||||||
Reconciliation of Non-GAAP Financial Measures |
|||||||||
First Quarter |
% Incr. / |
||||||||
(Dollars in Millions Except Per Share Data) |
2014 |
2013 |
(Decr.) |
||||||
Earnings before provision for taxes on income - as reported |
$ 5,424 |
4,261 |
27.3 |
% |
|||||
Litigation expenses |
- |
529 |
|||||||
Synthes integration/transaction costs |
118 |
258 |
|||||||
In-process research and development |
18 |
64 |
|||||||
Other |
- |
(42) |
|||||||
Earnings before provision for taxes on income - as adjusted |
$ 5,560 |
5,070 |
9.7 |
% |
|||||
Net Earnings - as reported |
$ 4,727 |
3,497 |
35.2 |
% |
|||||
Litigation expenses |
- |
391 |
|||||||
Synthes integration/transaction costs |
84 |
183 |
|||||||
In-process research and development |
13 |
42 |
|||||||
Tax benefit associated with |
(398) |
- |
|||||||
Other |
- |
(6) |
|||||||
Net Earnings - as adjusted |
$ 4,426 |
4,107 |
7.8 |
% |
|||||
Diluted Net Earnings per share - as reported |
$ 1.64 |
1.22 |
34.4 |
% |
|||||
Litigation expenses |
- |
0.14 |
|||||||
Synthes integration/transaction costs |
0.03 |
0.06 |
|||||||
In-process research and development |
0.01 |
0.02 |
|||||||
Tax benefit associated with |
(0.14) |
- |
|||||||
Other |
- |
- |
|||||||
Diluted Net Earnings per share - as adjusted |
$ 1.54 |
1.44 |
6.9 |
% |
|||||
The Company believes investors gain additional perspective of underlying business trends and results by providing a measure of earnings before provision for taxes on income, net earnings and diluted net earnings per share that excludes special items in order to evaluate ongoing business operations. |
REPORTED SALES vs. PRIOR PERIOD ($MM) |
|||||||
FIRST QUARTER |
|||||||
% Change |
|||||||
2014 |
2013 |
Reported |
Operational (1) |
Currency |
|||
CONSUMER SEGMENT (2) |
|||||||
|
|||||||
US |
$ 102 |
103 |
-1.0% |
-1.0% |
- |
||
Intl |
443 |
461 |
-3.9% |
2.4% |
-6.3% |
||
WW |
545 |
564 |
-3.4% |
1.7% |
-5.1% |
||
ORAL CARE |
|||||||
US |
160 |
158 |
1.3% |
1.3% |
- |
||
Intl |
251 |
245 |
2.4% |
6.9% |
-4.5% |
||
WW |
411 |
403 |
2.0% |
4.7% |
-2.7% |
||
OTC |
|||||||
US |
366 |
354 |
3.4% |
3.4% |
- |
||
Intl |
645 |
689 |
-6.4% |
-3.6% |
-2.8% |
||
WW |
1,011 |
1,043 |
-3.1% |
-1.2% |
-1.9% |
||
|
|||||||
US |
457 |
453 |
0.9% |
0.9% |
- |
||
Intl |
457 |
449 |
1.8% |
4.5% |
-2.7% |
||
WW |
914 |
902 |
1.3% |
2.7% |
-1.4% |
||
WOMEN'S HEALTH |
|||||||
US |
24 |
81 |
-70.4% |
-70.4% |
- |
||
Intl |
303 |
320 |
-5.3% |
1.0% |
-6.3% |
||
WW |
327 |
401 |
-18.5% |
-13.4% |
-5.1% |
||
WOUND CARE/OTHER |
|||||||
US |
200 |
199 |
0.5% |
0.5% |
- |
||
Intl |
149 |
163 |
-8.6% |
-6.4% |
-2.2% |
||
WW |
349 |
362 |
-3.6% |
-2.6% |
-1.0% |
||
TOTAL CONSUMER |
|||||||
US |
1,309 |
1,348 |
-2.9% |
-2.9% |
- |
||
Intl |
2,248 |
2,327 |
-3.4% |
0.7% |
-4.1% |
||
WW |
$ 3,557 |
3,675 |
-3.2% |
-0.6% |
-2.6% |
||
See footnotes at end of schedule |
REPORTED SALES vs. PRIOR PERIOD ($MM) |
|||||||
FIRST QUARTER |
|||||||
% Change |
|||||||
2014 |
2013 |
Reported |
Operational (1) |
Currency |
|||
PHARMACEUTICAL SEGMENT (2) (3) |
|||||||
IMMUNOLOGY |
|||||||
US |
$ 1,547 |
1,639 |
-5.6% |
-5.6% |
- |
||
Intl |
796 |
565 |
40.9% |
46.6% |
-5.7% |
||
WW |
2,343 |
2,204 |
6.3% |
7.8% |
-1.5% |
||
REMICADE |
|||||||
US |
997 |
970 |
2.8% |
2.8% |
- |
||
US Exports (4) |
167 |
349 |
-52.1% |
-52.1% |
- |
||
Intl |
446 |
281 |
58.7% |
67.3% |
-8.6% |
||
WW |
1,610 |
1,600 |
0.6% |
2.1% |
-1.5% |
||
SIMPONI/SIMPONI ARIA |
|||||||
US |
104 |
94 |
10.6% |
10.6% |
- |
||
Intl |
155 |
143 |
8.4% |
12.3% |
-3.9% |
||
WW |
259 |
237 |
9.3% |
11.6% |
-2.3% |
||
STELARA |
|||||||
US |
279 |
226 |
23.5% |
23.5% |
- |
||
Intl |
177 |
120 |
47.5% |
48.2% |
-0.7% |
||
WW |
456 |
346 |
31.8% |
32.0% |
-0.2% |
||
OTHER IMMUNOLOGY |
|||||||
US |
- |
- |
- |
- |
- |
||
Intl |
18 |
21 |
-14.3% |
-5.8% |
-8.5% |
||
WW |
18 |
21 |
-14.3% |
-5.8% |
-8.5% |
||
INFECTIOUS DISEASES |
|||||||
US |
561 |
238 |
* |
* |
- |
||
Intl |
639 |
577 |
10.7% |
11.8% |
-1.1% |
||
WW |
1,200 |
815 |
47.2% |
48.0% |
-0.8% |
||
EDURANT |
|||||||
US |
5 |
3 |
66.7% |
66.7% |
- |
||
Intl |
76 |
40 |
90.0% |
86.8% |
3.2% |
||
WW |
81 |
43 |
88.4% |
85.4% |
3.0% |
||
INCIVO |
|||||||
US |
- |
- |
- |
- |
- |
||
Intl |
86 |
162 |
-46.9% |
-47.4% |
0.5% |
||
WW |
86 |
162 |
-46.9% |
-47.4% |
0.5% |
||
OLYSIO/SOVRIAD |
|||||||
US |
291 |
- |
* |
* |
- |
||
Intl |
63 |
- |
* |
* |
0.0% |
||
WW |
354 |
- |
* |
* |
0.0% |
||
PREZISTA |
|||||||
US |
214 |
167 |
28.1% |
28.1% |
- |
||
Intl |
231 |
200 |
15.5% |
15.5% |
0.0% |
||
WW |
445 |
367 |
21.3% |
21.3% |
0.0% |
||
OTHER INFECTIOUS DISEASES |
|||||||
US |
51 |
68 |
-25.0% |
-25.0% |
- |
||
Intl |
183 |
175 |
4.6% |
5.8% |
-1.2% |
||
WW |
234 |
243 |
-3.7% |
-2.8% |
-0.9% |
REPORTED SALES vs. PRIOR PERIOD ($MM) |
|||||||
FIRST QUARTER |
|||||||
% Change |
|||||||
2014 |
2013 |
Reported |
Operational (1) |
Currency |
|||
NEUROSCIENCE |
|||||||
US |
601 |
746 |
-19.4% |
-19.4% |
- |
||
Intl |
1,037 |
998 |
3.9% |
7.6% |
-3.7% |
||
WW |
1,638 |
1,744 |
-6.1% |
-4.0% |
-2.1% |
||
CONCERTA/METHYLPHENIDATE |
|||||||
US |
35 |
139 |
-74.8% |
-74.8% |
- |
||
Intl |
115 |
117 |
-1.7% |
2.9% |
-4.6% |
||
WW |
150 |
256 |
-41.4% |
-39.3% |
-2.1% |
||
INVEGA |
|||||||
US |
86 |
71 |
21.1% |
21.1% |
- |
||
Intl |
79 |
61 |
29.5% |
34.0% |
-4.5% |
||
WW |
165 |
132 |
25.0% |
27.1% |
-2.1% |
||
INVEGA SUSTENNA/ XEPLION |
|||||||
US |
182 |
164 |
11.0% |
11.0% |
- |
||
Intl |
191 |
120 |
59.2% |
60.7% |
-1.5% |
||
WW |
373 |
284 |
31.3% |
31.9% |
-0.6% |
||
RISPERDAL CONSTA |
|||||||
US |
106 |
106 |
0.0% |
0.0% |
- |
||
Intl |
204 |
229 |
-10.9% |
-9.1% |
-1.8% |
||
WW |
310 |
335 |
-7.5% |
-6.3% |
-1.2% |
||
OTHER NEUROSCIENCE |
|||||||
US |
192 |
266 |
-27.8% |
-27.8% |
- |
||
Intl |
448 |
471 |
-4.9% |
0.1% |
-5.0% |
||
WW |
640 |
737 |
-13.2% |
-10.0% |
-3.2% |
||
ONCOLOGY |
|||||||
US |
240 |
199 |
20.6% |
20.6% |
- |
||
Intl |
782 |
595 |
31.4% |
33.4% |
-2.0% |
||
WW |
1,022 |
794 |
28.7% |
30.2% |
-1.5% |
||
VELCADE |
|||||||
US |
- |
- |
- |
- |
- |
||
Intl |
408 |
353 |
15.6% |
18.6% |
-3.0% |
||
WW |
408 |
353 |
15.6% |
18.6% |
-3.0% |
||
ZYTIGA |
|||||||
US |
229 |
161 |
42.2% |
42.2% |
- |
||
Intl |
283 |
183 |
54.6% |
54.6% |
0.0% |
||
WW |
512 |
344 |
48.8% |
48.8% |
0.0% |
||
OTHER ONCOLOGY |
|||||||
US |
11 |
38 |
-71.1% |
-71.1% |
- |
||
Intl |
91 |
59 |
54.2% |
56.0% |
-1.8% |
||
WW |
102 |
97 |
5.2% |
6.3% |
-1.1% |
REPORTED SALES vs. PRIOR PERIOD ($MM) |
|||||||
FIRST QUARTER |
|||||||
% Change |
|||||||
2014 |
2013 |
Reported |
Operational (1) |
Currency |
|||
TOTAL OTHER |
|||||||
US |
791 |
649 |
21.9% |
21.9% |
- |
||
Intl |
504 |
562 |
-10.3% |
-8.7% |
-1.6% |
||
WW |
1,295 |
1,211 |
6.9% |
7.6% |
-0.7% |
||
PROCRIT/EPREX |
|||||||
US |
176 |
233 |
-24.5% |
-24.5% |
- |
||
Intl |
134 |
145 |
-7.6% |
-6.6% |
-1.0% |
||
WW |
310 |
378 |
-18.0% |
-17.6% |
-0.4% |
||
XARELTO |
|||||||
US |
319 |
158 |
* |
* |
- |
||
Intl |
- |
- |
- |
- |
- |
||
WW |
319 |
158 |
* |
* |
- |
||
OTHER |
|||||||
US |
296 |
258 |
14.7% |
14.7% |
- |
||
Intl |
370 |
417 |
-11.3% |
-9.6% |
-1.7% |
||
WW |
666 |
675 |
-1.3% |
-0.2% |
-1.1% |
||
TOTAL PHARMACEUTICAL |
|||||||
US |
3,740 |
3,471 |
7.7% |
7.7% |
- |
||
Intl |
3,758 |
3,297 |
14.0% |
16.9% |
-2.9% |
||
WW |
$ 7,498 |
6,768 |
10.8% |
12.2% |
-1.4% |
||
Supplemental Sales Information |
|||||||
2013 |
|||||||
Q1 |
Q2 |
Q3 |
Q4 |
Full Year |
|||
EDURANT |
|||||||
US |
3 |
3 |
4 |
5 |
15 |
||
Intl |
40 |
53 |
60 |
68 |
221 |
||
WW |
43 |
56 |
64 |
73 |
236 |
||
OLYSIO/SOVRIAD |
|||||||
US |
- |
- |
- |
13 |
13 |
||
Intl |
- |
- |
- |
10 |
10 |
||
WW |
- |
- |
- |
23 |
23 |
||
See footnotes at end of schedule |
REPORTED SALES vs. PRIOR PERIOD ($MM) |
|||||||
FIRST QUARTER |
|||||||
% Change |
|||||||
2014 |
2013 |
Reported |
Operational (1) |
Currency |
|||
MEDICAL DEVICES AND DIAGNOSTICS (2) (3) |
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CARDIOVASCULAR CARE |
|||||||
US |
$ 205 |
198 |
3.5% |
3.5% |
- |
||
Intl |
336 |
315 |
6.7% |
9.4% |
-2.7% |
||
WW |
541 |
513 |
5.5% |
7.2% |
-1.7% |
||
DIABETES CARE |
|||||||
US |
192 |
283 |
-32.2% |
-32.2% |
- |
||
Intl |
320 |
317 |
0.9% |
2.9% |
-2.0% |
||
WW |
512 |
600 |
-14.7% |
-13.7% |
-1.0% |
||
DIAGNOSTICS |
|||||||
US |
224 |
248 |
-9.7% |
-9.7% |
- |
||
Intl |
219 |
229 |
-4.4% |
-0.9% |
-3.5% |
||
WW |
443 |
477 |
-7.1% |
-5.4% |
-1.7% |
||
ORTHOPAEDICS |
|||||||
US |
1,292 |
1,261 |
2.5% |
2.5% |
- |
||
Intl |
1,129 |
1,124 |
0.4% |
2.9% |
-2.5% |
||
WW |
2,421 |
2,385 |
1.5% |
2.7% |
-1.2% |
||
SPECIALTY SURGERY/OTHER (5) |
|||||||
US |
417 |
404 |
3.2% |
3.2% |
- |
||
Intl |
457 |
435 |
5.1% |
9.3% |
-4.2% |
||
WW |
874 |
839 |
4.2% |
6.4% |
-2.2% |
||
SURGICAL CARE |
|||||||
US |
539 |
531 |
1.5% |
1.5% |
- |
||
Intl |
969 |
977 |
-0.8% |
2.2% |
-3.0% |
||
WW |
1,508 |
1,508 |
0.0% |
1.9% |
-1.9% |
||
VISION CARE |
|||||||
US |
286 |
281 |
1.8% |
1.8% |
- |
||
Intl |
475 |
459 |
3.5% |
10.0% |
-6.5% |
||
WW |
761 |
740 |
2.8% |
6.8% |
-4.0% |
||
TOTAL MEDICAL DEVICES AND DIAGNOSTICS |
|||||||
US |
3,155 |
3,206 |
-1.6% |
-1.6% |
- |
||
Intl |
3,905 |
3,856 |
1.3% |
4.6% |
-3.3% |
||
WW |
$ 7,060 |
7,062 |
0.0% |
1.8% |
-1.8% |
||
* Percentage greater than 100% |
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(1) Operational growth excludes the effect of translational currency |
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(2) Unaudited |
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(3) Prior year amounts have been reclassified to conform to current year product disclosure |
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(4) Reported as U.S. sales |
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(5) Infection Prevention now reflected in Specialty Surgery/Other, previously reported independently |