Sign in
J&

JOHNSON & JOHNSON (JNJ)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $22.520B (+5.3% reported; +6.7% operational); GAAP EPS $1.41 and adjusted EPS $2.04, with $(0.22) from acquired IPR&D related to V-Wave, driving year-over-year EPS declines versus Q4 2023 .
  • 2025 guidance introduced: operational sales $90.9–$91.7B (midpoint +3.0%), estimated reported sales $89.2–$90.0B (midpoint +1.0%), adjusted operational EPS $10.75–$10.95 (midpoint +8.7%); tax rate 16.5–17.0% and ~300 bps adjusted pretax margin increase YoY, with lower acquired IPR&D spend aiding margins .
  • Oncology outperformed: DARZALEX reached its first $3B+ quarter ($3.084B, +20.9% YoY), CARVYKTI grew >100% to $334M, and ERLEADA +20.9% YoY, offsetting immunology headwinds from STELARA biosimilar erosion .
  • MedTech grew solidly (+6.7% reported; +7.6% operational), led by cardiovascular (EP, Abiomed, Shockwave), though U.S. VARIPULSE cases were temporarily paused pending investigation of neurovascular events; ex-U.S. rollout continues .
  • Wall Street consensus via S&P Global could not be retrieved at the time of writing; beat/miss assessment versus estimates is therefore omitted (S&P Global data not available).

What Went Well and What Went Wrong

What Went Well

  • Multiple myeloma portfolio delivered outsized growth: “DARZALEX growth was 23.5%… This marks Johnson & Johnson’s first brand to achieve over $3 billion in sales in a quarter,” and CARVYKTI achieved $334M with sequential growth of 17.3% on capacity expansion .
  • Pipeline and regulatory momentum: “We received FDA approval of SPRAVATO as the first and only monotherapy for adults with treatment-resistant depression… initiated a new drug application with the FDA for TAR-200” .
  • MedTech execution: EP grew 7.3% with broad portfolio strength; Abiomed +13.2% despite IV saline shortages; Shockwave contributed $258M in Q4 .

What Went Wrong

  • STELARA erosion and category pressure: Q4 STELARA WW declined 14.7% YoY; management highlighted expanded U.S. biosimilar competition beginning Jan 2025 and Part D redesign impacts (~$2B negative in 2025 for Innovative Medicine) .
  • Margin compression from strategic investment: Adjusted pretax margin fell to 24.1% from 29.2% YoY, with Q4 R&D at $5.298B (23.5% of sales) and $540M acquired IPR&D (V-Wave) weighing on results .
  • EP/PFA competitive dynamics and U.S. VARIPULSE pause: Near-term U.S. EP headwinds from competitive PFA uptake; temporary pause on VARIPULSE cases in the U.S. while investigating neurovascular events (no ex-U.S. impact) .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$22.447 $22.471 $22.520
GAAP Diluted EPS ($)$1.93 $1.11 $1.41
Adjusted Diluted EPS ($)$2.82 $2.42 $2.04
Gross Profit Margin (%)69.4% 69.0% 68.4%
Adjusted Income Before Tax (% of Sales)37.4% 32.4% 24.1%
Effective Tax Rate (GAAP) (%)18.5% 19.3% 11.7%
Adjusted Effective Tax Rate (%)18.6% 19.3% 8.8%
Segment Revenue ($USD Billions)Q2 2024Q3 2024Q4 2024
Innovative Medicine (Reported, YoY %)$14.490 (+5.5%) $14.580 (+4.9%) $14.332 (+4.4%)
MedTech (Reported, YoY %)$7.957 (+2.2%) $7.891 (+5.8%) $8.188 (+6.7%)
Selected KPIs (Worldwide, $USD Millions)Q2 2024Q3 2024Q4 2024
DARZALEX2,878 3,016 3,084
CARVYKTI186 286 334
ERLEADA736 790 784
TREMFYA906 1,007 949
STELARA2,885 2,676 2,349
SPRAVATO271 284 297
Electrophysiology1,323 1,279 1,321
Abiomed379 362 384
Shockwave77 229 258

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operational Sales ($)FY 2025~3% operational growth referenced at late-2023 EBR $90.9–$91.7B (midpoint $91.3B); +2.5%–3.5%Maintained trajectory
Estimated Reported Sales ($)FY 2025N/A$89.2–$90.0B (midpoint $89.6B); +0.5%–1.5%New
Adjusted Operational EPS (Diluted) ($)FY 2025“Nearly 9%” growth indicated $10.75–$10.95 (midpoint $10.85); +7.7%–9.7%In-line (formalized)
Adjusted EPS (Diluted) ($)FY 2025N/A$10.50–$10.70 (midpoint $10.60)New
Adjusted Pretax Operating Margin (YoY)FY 2025Prior commentary lower by ~50 bps +~300 bps YoYRaised vs prior by ~50 bps
Net Other Income ($)FY 2025N/A$0.9–$1.1BNew
Net Interest Income ($)FY 2025N/A$0–$100MNew
Effective Tax Rate (%)FY 2025N/A16.5%–17.0%New
DividendOngoing62nd consecutive annual increase; plan to continue Continue annual increasesMaintained

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
Multiple Myeloma (DARZALEX, CARVYKTI, TECVAYLI/TALVEY)OS data; strong growth; portfolio expansion Strong double-digit growth; capacity expansion DARZALEX $3.084B; CARVYKTI $334M; expanding into earlier lines; MRD-negativity combinations Strengthening
STELARA LOE/BiosimilarsGrowth in Q2 int’l; mix improving WW decline; early erosion discussion Material decline; U.S. biosimilars Jan 2025; Part D redesign impact Worsening (offset by TREMFYA IBD)
EP/PFA & VARIPULSEadmIRE data; portfolio launches Inventory/comps dynamics; competitive PFA pressures U.S. VARIPULSE pause; ex-U.S. rollout ~3,000 cases; portfolio expansion underway Near-term U.S. headwind; ex-U.S. solid
China Macro/VBPAP headwinds called out Continued Asia headwinds Expect China to remain a headwind through 2025 Persistent headwind
R&D ExecutionMultiple filings/approvals across IM & MedTech Further approvals and filings “27 approvals…49 filings”; fast start in 2025 Strong, accelerating
Legal/TalcPlan to resolve via prepackaged reorg Continued progress described Confirmation hearing set for Feb 18 (S.D. Tex.) Advancing toward resolution

Management Commentary

  • “2024 was a transformative year… strong growth, an accelerating pipeline and industry-leading investments in innovation” (CEO Duato) .
  • “We expect to deliver operational sales growth of 3%… and adjusted operational EPS growth of nearly 9%” (CEO Duato on 2025) .
  • “DARZALEX growth was 23.5%… first brand to achieve over $3 billion in sales in a quarter… CARVYKTI achieved $334 million with sequential growth of 17.3%” (IR lead Moore) .
  • “Adjusted pretax operating margins [to] increase by ~300 bps… about 50 bps better than we discussed on the Q3 call” (CFO Wolk) .
  • “Temporary pause of all U.S. VARIPULSE cases… patient safety is always an absolute priority… no expected impact outside of the U.S.” (MedTech head Schmid) .

Q&A Highlights

  • Multiple myeloma ramp: Management emphasized expanding into earlier lines, MRD-negativity combinations with bispecifics, and CARVYKTI studies potentially replacing autologous transplant; 5,000th patient infused milestone .
  • MedTech portfolio and M&A: Strategy mixes bolt-ons (Abiomed, Shockwave) with numerous smaller BD deals; confidence in first-mover advantage in IVL and future EP portfolio breadth .
  • Immunology positioning: TREMFYA expected to benefit from switches amid STELARA erosion; differentiation via dual-acting mechanism in IBD and subcutaneous induction flexibility; strong coverage and permanent J-code .
  • EP/VARIPULSE specifics: U.S. pause limited to VARIPULSE; ex-U.S. rollout robust; entrenched Cardo installed base and expanding PFA portfolio .
  • Margin trajectory: Operating margin improvement driven by focused OpEx, restructuring benefits in orthopedics, and tech-enabled efficiencies; 2025 EPS growth back-half weighted .

Estimates Context

  • S&P Global Wall Street consensus estimates were unavailable during this session; as a result, an assessment of beat/miss versus consensus is omitted and will be updated when accessible (S&P Global data not available).

Key Takeaways for Investors

  • Oncology remains the growth engine: DARZALEX, CARVYKTI, ERLEADA and bispecifics offset immunology LOE; momentum likely to continue into 2025 .
  • Immunology transition: STELARA erosion intensifies in 2025; TREMFYA IBD launches and pricing/access strategy are critical to backfilling declines .
  • MedTech resilient with cardiovascular strength: EP, Abiomed and Shockwave underpin growth; near-term U.S. PFA/VARIPULSE headwind is contained ex-U.S. .
  • Margin recovery story: Management guiding ~300 bps adjusted pretax margin expansion in 2025, supported by lower acquired IPR&D and cost discipline .
  • FX headwinds in 2025: Reported sales and EPS include estimated currency drags; operational metrics stronger than headline implies .
  • Litigation overhang easing: Talc prepackaged plan advancing toward court confirmation, potentially reducing legal uncertainty .
  • 2025 setup: Back-half weighted growth across both segments as new launches ramp and LOE headwinds are absorbed; watch for approvals (TREMFYA Crohn’s, nipocalimab gMG, subcutaneous RYBREVANT) and EP portfolio updates .

Appendix: Additional Q4 Press Releases and Notables

  • SPRAVATO monotherapy FDA approval (Jan 21, 2025) .
  • TAR-200 NDA initiated (Jan 15, 2025) .
  • Nipocalimab priority review (Jan 9, 2025) .
  • RYBREVANT + LAZCLUZE overall survival improvement (Jan 7, 2025) .
  • Q4 and Full-Year 2024 results press release (Jan 22, 2025) .