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InvestingJohnson & Johnson's (JNJ) 3 Most Profitable Business Lines

Johnson & Johnson’s (JNJ) 3 Most Profitable Business Lines

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Johnson & Johnson: A Brief Overview

Johnson & Johnson (JNJ) is likely one of the world’s largest multinational corporations. Founded in 1886 by three brothers, the corporate is headquartered in New Brunswick, New Jersey. It operates greater than 250 completely different subsidiaries in over 60 international locations, using over 130,000 folks. JNJ is a serious innovator within the well being care sector. In truth, it was the very first firm to supply dental floss, female hygiene merchandise, first assist children, and maternity kits on a mass scale.

The firm trades on the New York Stock Exchange (NYSE) with share costs closing at $161.98 on June 18, 2021, with a market capitalization of $426.56 billion. JNJ reported $82.58 billion in revenue for the 2020 fiscal 12 months—$43.13 from the United States whereas the remaining $39.45 got here from worldwide sources.

Johnson & Johnson derives its profitability from three distinct segments: Pharmaceuticals, medical units, and shopper merchandise. What follows is a breakdown of the gross sales income by section for the complete 12 months of 2020.

Key Takeaways

  • Johnson & Johnson is a huge within the well being care house that was based in 1886.
  • The multi-billion market cap firm has three key segments: Pharmaceuticals, medical units, and shopper merchandise. 
  • The prescription drugs enterprise makes up roughly half of Johnson & Johnson’s pretax revenue.
  • Medical units make up 40% and the buyer merchandise division contains 10% of its revenue.
  • Despite efficiently growing the world’s first single-dose COVID-19 vaccine in 2020, JNJ had some challenges due to potential uncomfortable side effects and high quality management points.

Pharmaceuticals

The pharmaceutical section of Johnson & Johnson generates nearly all of the corporate’s sales. This division accounted for greater than half of JNJ’s income for the complete 12 months. At over 55% of total income, prescription drugs drew in a complete of $45.57 billion in gross sales. This was a development of 8.4% from the earlier 12 months.

The firm pointed to a number of highlights that boosted development within the section, together with demand for a few of its key biologic drugs. These drugs are used within the remedy of immune-mediated inflammatory illnesses, cancer, psoriatic arthritis, and schizophrenia.

JNJ developed the world’s first single-dose COVID-19 vaccine, which contributed to its monetary success for the fiscal year. Federal authorities within the United States accredited the usage of the vaccine within the combat in opposition to the pandemic in February 2021. Clinical trials demonstrated that the vaccine was 85% efficient in opposition to the virus.

The U.S. rollout for the JNJ vaccine was stalled, following reviews of extreme uncomfortable side effects and points with quality control. But the corporate’s worldwide vaccine rollout has progressed, with the U.Ok. authorities authorizing it for emergency use in May 2021. The vaccine can be awaiting approval to be used in Japan as of June 2021. Plans are within the works to increase its use in India.

Johnson & Johnson’s profitability will not be damaged down by area however the firm does disclose U.S. and worldwide gross sales totals.

Medical Devices

This division is split into 4 completely different areas, together with:

  • Orthopedics: joint reconstruction, trauma, backbone, sports activities drugs, and energy instruments
  • Surgery: surgical programs and devices
  • Interventional options: coronary heart rhythm problems and neurovascular care assist for well being care professionals
  • Vision

Revenue for the medical units section dropped in 2020 by 10.5%. The firm attributed this to the consequences of the COVID-19 pandemic in addition to medical process deferrals. Medical units generated about $22.96 billion in gross sales, which represented 27.8% of complete revenue for the 12 months.

Despite the challenges, the corporate—and the trade—skilled throughout the 12 months due to the pandemic, Johnson & Johnson mentioned it concentrated its efforts on pressing wants by coaching over six million medical staff and offering private protecting tools.

Consumer Products

Johnson & Johnson’s shopper merchandise section affords a broad vary of merchandise utilized in three distinct classes:

  • Skin well being
  • Self-care
  • Essential well being

These classes present customers with a variety of merchandise starting from child care, oral care, magnificence merchandise, ladies’s well being, wound care, to over-the-counter medicines like Tylenol, Motrin, Zyrtec, and Benadryl.

This section was answerable for 17% of complete gross sales, representing $14.05 billion of income for the complete 12 months. According to the earnings report, the division’s gross sales grew by 3% from the earlier 12 months, fuelled by demand for a few of its key model names, together with Tylenol and Listerine.

The firm additionally highlighted the launch of about 200 new product strains throughout the fiscal 12 months. This included the discharge of a digital smoking cessation device within the United Kingdom.



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