Financial Data and Key Metrics Changes - In Q1 2025, Johnson & Johnson reported worldwide sales of 11 billion, with diluted earnings per share at 1.34 a year ago, primarily due to the reversal of a 6.7 billion, with adjusted diluted earnings per share at 13.9 billion, up 4.2%, with U.S. growth at 6.3% and international growth at 1.5% [40] - Oncology products like Darzalex grew by 22.5%, while Carvicti saw over 100% growth, achieving sales of 8 billion, a 4.1% increase, with U.S. growth at 5.1% and international growth at 3% [46] Market Data and Key Metrics Changes - U.S. sales growth was 5.9%, while international sales growth was 2.1%, positively impacted by acquisitions and divestitures [37] - The MedTech segment faced challenges due to one-time events and competitive pressures, particularly in orthopedics, which declined by 3.1% [50][46] Company Strategy and Development Direction - The company plans to invest over 55 billion in the U.S. over the next four years to enhance manufacturing and R&D capabilities [19][20] - Johnson & Johnson aims to exit non-strategic product lines and optimize select sites to improve growth and profitability, with a restructuring program expected to be completed by 2027 [60][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite challenges from Stellara biosimilars and Part D redesign, highlighting a 4.2% growth across Innovative Medicine [10][102] - The company anticipates higher growth in the second half of 2025, driven by new product launches and a strong pipeline [66][71] Other Important Information - The company announced a 4.8% increase in dividends, marking the 63rd consecutive year of dividend increases [22][64] - Johnson & Johnson reversed a 7 billion reserve related to the talc settlement, which is expected to positively impact capital allocation priorities [65] Q&A Session Summary Question: Impact of tariffs on guidance - Management explained that the $400 million in tariffs primarily affects MedTech and includes various tariffs from Mexico, Canada, and China, with limited price leverage available to mitigate these costs [82][86] Question: Gross margins in the quarter - Management noted that gross margins were impacted by Stellara's decline and Part D redesign, with expectations for improvement moving forward [93][96] Question: Stellara biosimilar erosion - Management confirmed that the impact of Stellara biosimilars was in line with expectations, with overall business growth remaining strong despite this headwind [99][102] Question: Recession impact on business - Management indicated that healthcare has proven to be more recession-proof than other industries, with a focus on monitoring job reports as a precursor to healthcare demand [110][112] Question: Section 232 potential pharma tariffs - Management is analyzing the potential impact of Section 232 tariffs and emphasized the importance of partnering with the administration to mitigate vulnerabilities in the healthcare supply chain [117][120]
J&J(JNJ) - 2025 Q1 - Earnings Call Transcript