Johnson & Johnson Earnings Cheat Sheet: Margins Shrink For Fifth Straight Quarter as Profit Falls

S&P 500 (NYSE:SPY) component Johnson & Johnson (NYSE:JNJ) reported its results for the second quarter. Johnson & Johnson is a holding company involved in the research and development, manufacture and sale of a range of health care products.

Don’t Miss: Wall St. Cheat Sheet’s newest Feature Trades of the Month!

Johnson & Johnson Earnings Cheat Sheet for the Second Quarter

Results: Net income for Johnson & Johnson fell to $2.78 billion ($1 per share) vs. $3.45 billion ($1.23 per share) a year earlier. This is a decline of 19.5% from the year earlier quarter.

Revenue: Rose 8.3% to $16.6 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: JNJ reported adjusted net income of $1.28 per share. By that measure, the company beat the mean estimate of $1.24 per share. It beat the average revenue estimate of $16.22 billion.

Quoting Management: “Our recently launched pharmaceutical products continued to achieve strong growth and contributed to our solid second quarter results. We received several new product approvals across our businesses which will benefit patients around the world and drive future growth,” said William C. Weldon, Chairman and Chief Executive Officer.”We continue to invest in building leadership positions and capabilities, and our pending acquisition of Synthes demonstrates our ongoing commitment to serve patients while enhancing shareholder value,” said Weldon.

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell one percentage point to 68.8% from the year earlier quarter. Over that time, margins have contracted on average 0.8 percentage point per quarter on a year-over-year basis.

The company has now seen net income fall in each of the last three quarters. In the first quarter, net income fell 23.2% from the year earlier, while the figure fell 12% in the fourth quarter of the last fiscal year.

The company has now beaten estimates the last two quarters. In the first quarter, it topped expectations with net income of $1.35 versus a mean estimate of net income of $1.25 per share.

The company’s revenue has now risen for two straight quarters. In the first quarter, revenue increased 3.5% to $16.17 billion from the year earlier quarter.

Competitors to Watch: Merck & Co., Inc. (NYSE:MRK), Pfizer Inc. (NYSE:PFE), Abbott Laboratories (NYSE:ABT), Eli Lilly & Co. (NYSE:LLY), GlaxoSmithKline plc (NYSE:GSK), Novartis AG (NYSE:NVS), Medtronic, Inc. (NYSE:MDT), Roche Holding Ltd. (RHHBY), Boston Scientific Corp. (NYSE:BSX), and Amgen, Inc. (NASDAQ:AMGN).

Don’t Miss Wall St. Cheat Sheet’s newest Feature Trades of the Month!

(Source: Xignite Financials)

More from The Cheat Sheet