J&J(US:JNJ)2023-10-26 16:00Worldwide and Regional Sales Performance - Worldwide sales for the fiscal nine months of 2023 were $63.8 billion, a 6.2% increase compared to $60.1 billion in 2022, with operational growth of 7.5% and a negative currency impact of 1.3%[208] - U.S. sales for the fiscal nine months of 2023 were $34.4 billion, a 10.5% increase compared to the prior year, with acquisitions and divestitures contributing a positive 2.5% to operational growth[209] - International sales for the fiscal nine months of 2023 were $29.3 billion, a 1.5% increase, including operational growth of 4.2% and a negative currency impact of 2.7%[209] - Sales in Europe for the fiscal nine months of 2023 declined by 0.6%, with operational decline of 1.0% and a positive currency impact of 0.4%[210] - Worldwide sales for the fiscal third quarter of 2023 were $21.4 billion, a 6.8% increase compared to $20.0 billion in 2022, with operational growth of 6.4% and a positive currency impact of 0.4%[211] - U.S. sales for the fiscal third quarter of 2023 were $12.0 billion, an 11.1% increase compared to the prior year, with acquisitions and divestitures contributing a positive 2.2% to operational growth[212] - International sales for the fiscal third quarter of 2023 were $9.4 billion, a 1.6% increase, including operational growth of 0.7% and a positive currency impact of 0.9%[212] Innovative Medicine Segment Performance - Innovative Medicine segment sales for the fiscal nine months of 2023 were $41.0 billion, a 4.2% increase compared to the same period a year ago, with operational growth of 5.1% and a negative currency impact of 0.9%[214] - U.S. Innovative Medicine sales for the fiscal nine months of 2023 increased by 8.8% compared to the same period a year ago, while international sales decreased by 1.2%[214] - Innovative Medicine segment sales for the fiscal third quarter of 2023 were $13.9 billion, a 5.1% increase compared to the same period a year ago, with operational growth of 4.3% and a positive currency impact of 0.8%[216] - Immunology products achieved operational growth of 12.4%, with STELARA sales reaching $2.864 billion, a 16.9% increase year-over-year[217][219] - Infectious Diseases sales declined by 37.8% operationally, primarily due to a 91.5% drop in COVID-19 vaccine revenue to $41 million[217][220] - Neuroscience products grew 4.6% operationally, driven by SPRAVATO sales increasing 82.1% to $183 million[217][221] - Oncology products saw 10.4% operational growth, with DARZALEX sales up 21.8% to $2.499 billion[217][221] - Pulmonary Hypertension sales grew 12.4% operationally, with UPTRAVI sales increasing 20.7% to $402 million[217][222] - Cardiovascular/Metabolism/Other products declined 8.0% operationally, with XARELTO sales down 9.4% to $625 million[217][222] MedTech Segment Performance - MedTech segment sales increased 10.0% to $22.7 billion, with operational growth of 12.0% and a negative currency impact of 2.0%[225][226] - Interventional Solutions sales surged 46.2% to $4.681 billion, driven by the Abiomed acquisition[226] - Vision sales grew 4.3% to $3.864 billion, with Contact Lenses/Other sales up 4.0% to $2.820 billion[226] - Total MedTech sales increased by 10.0% to $7.458 billion, with operational growth of 10.4% and a currency impact of -0.4%[227] - Interventional Solutions franchise achieved operational sales growth of 48.1%, driven by the acquisition of Abiomed and double-digit growth in Electrophysiology[229] - Orthopaedics franchise saw operational sales growth of 2.6%, with Hips and Knees growing by 6.5% and 6.7% respectively[228] - Vision franchise achieved operational sales growth of 5.4%, with Surgical segment growing by 10.3%[230] Financial Performance and Tax - Consolidated earnings before provision for taxes on income for Q3 2023 was $5.2 billion, representing 24.4% of sales[231] - Cost of products sold increased due to commodity inflation, restructuring-related excess inventory costs, and Abiomed amortization in the MedTech business[232] - Research and Development expenses decreased as a percent to sales, driven by cost management initiatives in the MedTech business and portfolio prioritization in the Innovative Medicine business[235] - Interest income in Q3 2023 was $374 million, up from $150 million in Q3 2022, due to higher rates of interest earned on cash balances[240] - Other (income) expense, net for Q3 2023 was unfavorable by $0.3 billion, primarily due to changes in the fair value of securities[244] - The Company's debt position was $29.9 billion as of October 1, 2023, compared to $32.0 billion the same period a year ago[240] - Innovative Medicine segment income before tax increased to $14.008 billion in the fiscal nine months of 2023, up from $12.424 billion in 2022, representing 34.1% of segment sales compared to 31.5% in 2022[245][247] - MedTech segment income before tax rose to $4.265 billion in the fiscal nine months of 2023, up from $3.641 billion in 2022, accounting for 18.8% of segment sales compared to 17.6% in 2022[245][248] - Worldwide income before tax for the fiscal nine months of 2023 was $10.236 billion, down from $15.519 billion in 2022, primarily due to a $7 billion charge related to the talc settlement proposal and a $0.6 billion unfavorable change in the fair value of the retained stake in Kenvue[245][246] - The worldwide effective income tax rate for the fiscal nine months of 2023 was 10.2%, down from 15.3% in 2022, as the Company continues to evaluate the potential impact of the OECD Pillar Two Framework[254] Cash Flow and Financial Position - Cash and cash equivalents increased to $19.7 billion at the end of the fiscal third quarter of 2023, up from $14.1 billion at the end of fiscal year 2022, driven by $14.9 billion in net cash generated from operating activities[256][257] - The Company secured a new 364-day Credit Facility of $10 billion in September 2023, which expires on September 5, 2024, providing access to substantial sources of funds[261] - As of October 1, 2023, the company had $23.5 billion in cash and equivalents, with a net debt position of $6.4 billion compared to a prior year net cash position of $1.1 billion[266] - The company paid $4.9 billion to the U.S. Treasury in the fiscal nine months of 2023, including $1.5 billion related to foreign undistributed earnings[267] - The company completed a $5.0 billion share repurchase program as of April 2, 2023[267] - The company declared regular cash dividends of $1.19 per share in July and October 2023, payable in September and December respectively[268] Restructuring and Charges - The Company recorded a pre-tax restructuring charge of $0.4 billion in the fiscal nine months of 2023 related to the prioritization of its R&D investment within the Innovative Medicine segment, including the discontinuation of its RSV adult vaccine program[251] - The MedTech segment initiated a restructuring program in the third quarter of 2023, resulting in a pre-tax restructuring expense of $0.2 billion, primarily related to inventory and instrument charges from market and product exits[252] Kenvue IPO and Related Transactions - Kenvue completed its IPO on May 8, 2023, issuing 198,734,444 shares at $22.00 per share, raising net proceeds of $4.2 billion[262] - Johnson & Johnson owned 89.6% of Kenvue's total outstanding shares post-IPO, with a non-controlling interest of $1.3 billion reflected in equity[262] - Johnson & Johnson disposed of 80.1% ownership of Kenvue through an exchange offer, receiving $31.4 billion in common stock and reducing its ownership to 9.5%[264] - Johnson & Johnson recorded a $21.0 billion gain from the Kenvue exchange offer, including a $2.8 billion gain on retained Kenvue shares[265] Subsidiaries and Regional Impact - The company's Russian subsidiaries represented less than 1% of consolidated assets and revenues as of October 1, 2023[270] - The company's Israel subsidiaries represented 1% of consolidated assets and less than 1% of revenues as of October 1, 2023[272] STELARA Biosimilar Settlement - The company anticipates no biosimilar version of STELARA in the U.S. until January 1, 2025, following settlements with third parties[220]