Johnson & Johnson Reports 5.2% Sales Growth, Net Earnings Decline in Q3 2024

As of September 29, 2024, Johnson & Johnson reported total assets of $178.3 billion, an increase from $167.6 billion at the end of 2023. Current assets included cash and cash equivalents of $20.0 billion, accounts receivable of $16.2 billion, and inventories of $12.6 billion. Total liabilities rose to $108.1 billion from $98.8 billion, while shareholders' equity increased to $70.2 billion from $68.8 billion.

For the fiscal third quarter of 2024, Johnson & Johnson's sales reached $22.5 billion, up 5.2% from $21.4 billion in the same quarter of 2023. The cost of products sold was $7.0 billion, resulting in a gross profit of $15.5 billion. However, net earnings from continuing operations fell to $2.7 billion, down from $4.3 billion in the prior year, with net earnings per share from continuing operations at $1.12, compared to $1.71 in Q3 2023.

For the nine months ended September 29, 2024, net earnings from continuing operations were $10.6 billion, an increase from $9.2 billion in the same period of 2023. Gross profit for this period was $46.0 billion, up from $44.0 billion. The company reported a comprehensive income of $10.6 billion, down from $30.1 billion in the previous year, largely due to the impact of the Kenvue separation.

The Innovative Medicine segment generated $14.6 billion in sales for Q3 2024, a 4.9% increase year-over-year, while the MedTech segment reported $7.9 billion, up 5.8%. Notable product performances included oncology sales, which rose 18.7% to $5.4 billion, and a significant increase in sales for SPRAVATO, which grew 56.8% to $243 million in the U.S.

Strategically, Johnson & Johnson completed several acquisitions, including Yellow Jersey Therapeutics for approximately $1.25 billion and Ambrx Biopharma for about $2.0 billion. The company also divested Acclarent, generating approximately $0.3 billion in proceeds. Restructuring efforts in the Innovative Medicine and MedTech segments resulted in pre-tax expenses of $100 million and $107 million, respectively, for the nine months of 2024.

The company faced ongoing legal challenges, including talc-related liabilities, with a cumulative charge of approximately $5.0 billion recorded for settlements and reserves. Additionally, Johnson & Johnson's net interest income increased to $433 million, attributed to higher interest rates on cash balances. The effective income tax rate for the nine months of 2024 was 16.9%, up from 10.2% in the previous year.