JNJ Q2 - Back To Business

Yesterday, Johnson & Johnson released bumper second-quarter numbers, beating expectations. This was mostly thanks to a great recovery from their pharmaceutical and medical devices businesses, driven higher because individuals can do elective surgeries again without throttling the healthcare system.

Worldwide revenues increased by 27.1% year-on-year to $23.3 billion. The consumer business saw a 13.3% revenue increase to $3.7 billion, with the biggest growth coming from wound-care products as well as skin health and other beauty products like Neutrogena and Listerine.

The pharmaceutical business enjoyed a 17.2% revenue increase to $12.6 billion as sales of immunology and cancer drugs like Stelara, Darzalex and Imbruvica rebounded strongly. The one-shot Covid-19 vaccine is actually a loss-leader currently, and saw sales of $164 million. Sales of the Covid shots are expected to contribute around $2.6 billion in revenues for the whole year of 2021. This business is conducted on a breakeven basis (not for profit).

The medical devices business also did really well, with revenues up 62.7% year-on-year to $7.0 billion. This was the business most hit by the pandemic. Last year elective surgeries were put on the back-burner to free up space for Covid patients. Today, it's back to business and doctors can't do them fast enough! The softest division here was orthopaedics which "only" grew revenues by 48.6%.

Johnson & Johnson has proven to be a resilient company after powering through a pandemic and two class action lawsuits. They also have a very good dividend yield. This is why I am convinced that their shares should be a core holding in every long-term investors' offshore portfolio.