Executive Summary
In Q4 2024, Johnson & Johnson achieved revenue of $22.5 billion, reflecting a growth of 6.7% compared to the previous year. This robust performance showcases management's strategic focus on high-growth segments such as oncology and immunology, with innovative products driving operational sales growth. Despite challenges posed by STELARA's loss of exclusivity and biosimilar competition, the company reported a net income of $3.43 billion and a diluted EPS of $1.41. Johnson & Johnson's diversified portfolio and substantial investment in R&D, which reached $5.3 billion, underscore its commitment to long-term growth, despite short-term pressures from the broader healthcare market. Management remains optimistic about achieving its sales and earnings growth targets for 2025, driven by ongoing innovations and strategic acquisitions.
Key Performance Indicators
QoQ: -27.23% | YoY:-38.77%
QoQ: 27.68% | YoY:-35.00%
Key Insights
**Revenue Performance:** Total revenue for Q4 2024 was $22.5 billion, up 6.7% YoY, driven by a 10% increase in US sales, while international sales grew by 2.5% with a negative impact of 290 basis points from STELARA. Yearly sales reached $88.8 billion, marking a 5.9% increase.
**Profitability:** Net income for the quarter stood at $3.43 billion, translating to an EPS of $1.41 compared to $1.70 YoY—a decline attributed to increased R&D expenditures. Adjusted net income was $4.9 billion, re...
Financial Highlights
Revenue Performance: Total revenue for Q4 2024 was $22.5 billion, up 6.7% YoY, driven by a 10% increase in US sales, while international sales grew by 2.5% with a negative impact of 290 basis points from STELARA. Yearly sales reached $88.8 billion, marking a 5.9% increase.
Profitability: Net income for the quarter stood at $3.43 billion, translating to an EPS of $1.41 compared to $1.70 YoY—a decline attributed to increased R&D expenditures. Adjusted net income was $4.9 billion, resulting in an adjusted EPS of $2.04, down from $2.29 YoY due to $0.22 per share impact from acquired IPR&D expenses.
R&D Investment: Johnson & Johnson invested approximately 24% of total sales into R&D, indicative of its commitment to innovation within its pharmaceutical and MedTech divisions.
Cash Flow: The company generated $20 billion in free cash flow in FY2024, reflecting strong operational efficiency despite increased capital outlay.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
22.52B |
5.32% |
0.22% |
| Gross Profit |
15.39B |
3.50% |
-0.75% |
| Operating Income |
3.84B |
-38.77% |
-27.23% |
| Net Income |
3.43B |
5.41% |
27.36% |
| EPS |
1.43 |
-35.00% |
27.68% |
Key Financial Ratios
operatingProfitMargin
17.1%
operatingCashFlowPerShare
$2.9
freeCashFlowPerShare
$2.01
Management Commentary
Management Insights:
- Joaquin Duato, Chairman and CEO, emphasized the strategic focus on diversifying the company's portfolio: "No other company can impact the entire patient journey as we do. We are not just a Pharma or MedTech company; we are a comprehensive healthcare company."
- Duato highlighted robust operational sales growth, and projected a 3% operational sales growth for 2025, overcoming significant biosimilar headwinds: "We are planning for adjusted operational earnings per share growth of nearly 9%."
Key Trends: Management noted a steady 7% operational sales growth without the COVID-19 vaccine, significant milestones achieved in oncology with brands like DARZALEX and CARVYKTI, and an accelerating pipeline that resulted in 27 approvals for new products in 2024.
"2024 was a year of progress and transformation for Johnson & Johnson. We made disciplined decisions to exit lower priority businesses while investing an industry-leading amount in our pipeline," - **Joaquin Duato**, Chairman and CEO.
— Joaquin Duato
"We remain one of the top investors in R&D across all industries. Our ability to strategically invest and deploy capital that unlocks value has made Johnson & Johnson successful in the past and will be as important for our success moving forward," - **Joseph Wolk**, CFO.
— Joseph Wolk
Forward Guidance
Management provided strong guidance for 2025, anticipating 3% operational growth amid challenges such as the entry of STELARA biosimilars. Key launches expected include TREMFYA for Crohn's disease and continued expansions in oncology and MedTech innovations, with overall adjusted EPS expected to rise nearly 9%. "Our diversified portfolio enables us to maintain sustained growth amid headwinds," said Duato.