Tuesday, July 22, 2014

Catching up on Earning season!-- Johnson & Johnson Earnings Review

Hey everyone! I am alive , well and absolutely loving DC and my internship. Learning so much I can’t even begin to explain how blessed I feel. I’ll write a catch up post soon but  is earnings season!! I’ll be posting earning results for the companies I currently own as they report earnings. Johnson and Johnson was the first company from my portfolio to report earnings, last week on 07/15/14. Here I give you a brief summary of the result, some educational pointers and my two cents...


Johnson & Johnson (Ticker: JNJ) is one of my portfolio favorites- by far! If you are looking for a company with diversity where it matters, this one should definitely be on your list. What do I mean by “where it matters”? Well, in a nutshell, J&J likely makes a lot of the products that you, as a consumer, uses on a consistent basis.  As indicated in their Yahoo! Finance “bio”—the company is engaged in the research and development, manufacture, and sale of various products in the health care industry worldwide. So, not only does this company excel at a domestic level but they are also known internationally.

Just to give you an idea—J&J is the “owner” of products such as Aveeno, Clean & Clear, Lubriderm, Neutrogena, Listerine, Band-Aid, Tylenol, Zyrtec, Motrin and even Splenda! (I just found out about Splenda as I did research for this post). And those listed are not even all of the products. The company strives towards innovation and works hard to remain relevant and a competitive leader within their industry. Need I say more? Definitely a stock I would recommend to anyone—from for my beginner investors to seasoned investors alike. If you are looking to buy shares, I would recommend buying when the market is down so you can get a little bit of a discount considering the stock is trading at about $102 per share. With that said-- current price shouldn't really matter to a long term investor whom believes in a company's long term growth potential.

Here are some of the earnings highlights of how they did during the second quarter 2014:

Quick Summary of financials

1.    Company reported sales of $19.5 Billion which represents an increase of 9.1% in comparison to the same quarter in 2013.

2.    Earnings Per Share came in at $1.51 (or $1.66, a whooping increase of 12.2%, excluding specialty items)

3.    Sales domestically (USA) increased 14.9% while international sales increased 4.4%-- for an overall operational growth of 5% (love seeing growth in a company that’s already big as it is).

Great News For New Drug approvals

As previously mentioned, JNJ strives to have a solid and successful R&D team who’s task is to come up with new products and development not only for the profitability of the company but for the sake of health and well-being of the consumer. During the quarter the Food & Drug Administration (FDA) granted approval of SYLVANT- a new drug for the treatment of patients with Castleman disease. Approval was also granted for VOKANAMET, a treatment for type-2 diabetes and OLYSIO for patients with hepatitis C.  Permission was also granted by the FDA to extend its adult indication of schizophrenia to include teenagers 15 and older (which opens up more market for the product).

The CEO showed continuous optimism in the company’s performance going forward and increased full-year 2014 earnings per share estimates to $5.85-$5.92. He indicated: “Our strong second quarter results reflect the continued success of our new product launches and the progress we have made in achieving our near-term priorities…our diversified business model, focus on long-term growth drivers and talented colleague’s position us well in this evolving and dynamic global health care market”. –Alex Gorsky, CEO.

My Two Cents:
Company is great, is well diversified, has strong results and continue to strive for future growth. Company stays in my portfolio.