J&J Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Johnson & Johnson (NYSE:JNJ) will unveil its latest earnings on Tuesday, October 16, 2012. Johnson & Johnson is a holding company involved in the research and development, manufacture and sale of a range of health care products.

Johnson & Johnson Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.21 per share, a decline of 2.4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.25. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.21 during the last month. Analysts are projecting profit to rise by 1.2% versus last year to $5.06.

Past Earnings Performance: Last quarter, the company beat estimates by one cent, coming in at net income of $1.30 a share versus the estimate of profit of $1.29 a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, profit fell 49.3% to $1.41 billion (50 cents a share) from $2.78 billion ($1 a share) the year earlier, but exceeded analyst expectations. Revenue fell 0.7% to $16.48 billion from $16.6 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 5.8% in revenue from the year-earlier quarter to $16.93 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.75 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 2.69 in the first quarter to the last quarter driven in part by a decrease in current assets. Current assets decreased 27% to $41.62 billion while liabilities rose by 12.5% to $23.85 billion.

Key Stats:

The company is hoping to rebound with this earnings release after a net income drop last quarter. Net income rose 12.5% in the first quarter before dropping in the second quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 0.2% in the first quarter and dropped again in the second quarter.

Analyst Ratings: With 14 analysts rating the stock a buy, none rating it a sell and eight rating the stock a hold, there are indications of a bullish stance by analysts.

Stock Price Performance: Between October 4, 2012 and October 10, 2012, the stock price dropped $1.05 (-1.5%), from $69.27 to $68.22. The stock price saw one of its best stretches over the last year between April 23, 2012 and May 3, 2012, when shares rose for nine straight days, increasing 3.1% (+$1.97) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight straight days, dropping 5.7% (-$3.72) over that span.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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