Thursday, 26 September 2013

A Closer Look at Johnson & Johnson's Medical Devices Business

Most investors recognize Johnson & Johnson (NYSE: JNJ  ) as a consumer health care products company, since that segment -- which produces Tylenol, Band-Aids, Listerine, and Neutrogena -- is the most visible of its three businesses. However, J&J's consumer health care segment is actually smaller than its other two business divisions: pharmaceuticals and medical devices and diagnostics.

In this article, I will discuss the growth trajectory of J&J's medical devices and diagnostics business, its largest unit, which accounted for 41% of the company's 2012 revenue. The segment is a much diversified one.

Analyzing the medical devices and diagnostics business
The medical devices business is currently J&J's second fastest growing business segment. Let's take a look at how it fared compared to the pharmaceuticals and consumer health care segment's last quarter.

Business Segment
Revenue
Growth (YOY)
Percentage of Total Revenue
Medical Devices & Diagnostics
$7.2 billion
9.6%
40%
Pharmaceuticals
$7.0 billion
11.7%
39%
Consumer Healthcare
$3.7 billion
1.1%
21%


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