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Johnson & Johnson 2012 1Q Financial Analysis

|Includes: Johnson & Johnson (JNJ)

Johnson & Johnson 2012 1Q results quite flat . Revenue has dropped from 16,2 bn.$ to 16,1 bn.$ (Δ-0,2%), earning increased due to 0,6 bn.$ income from favorable currency rate, if excluding this companies earnings would be also little bit less then previous year. Mostly due to that Net earning before depreciation increased from 4,2 bn.$ to 4,7 bn.$ but either way its a increase of 11%. And large 2,4 bn.$ expenses at Q4 for litigation settlements and product liabilities expenses.

Companies main sale market is US with 45%, but Europe is the second largest market with 26%, company also has a strong holding in Asia 19% so sales are well targeted and mainly on growth markets US and Asia. Main sale segment is Pharmaceutical which generates about half of companies profit. In general companies results are average.

Balance structure is improving after 4Q loss. Equity level has increased from ~50% to 53% is at good level and going in right direction - increasing. Return on asset at Q1 was the largest since Y2011 and was about 26%. Companies share repurchase program is quite conservative as company pays for dividends 1,5 bn.$ share repurchase reach only 0,07 bn.$ which is good compared to companies like IBM and Intel who spend more then they earn.

Other companies ratios are also good. Liquidity ratio is 2,7. Cash and investments holdings ~34 bn.$ which is ~28% of total companies asset. Inventory turnover is 40 and account receivables turnover is 60 days which is normal. Company has invested ~1 bn.$ at Q1 in long term asset. In general companies balance structure is acceptable.

Share value:

Equity / share 57,1 bn.$ 2,746 bn. 20,8 $/sh.
Market value 64,8 $ +44,0$ 9,2 years

(7,7 years)

Year Net income before Depreciation 13,3 bn.$

(15,7 bn.$)





Companies share basic value is ~20,8$. Current market price is ~64,8$, which shows that market is paying ~44$ more or 9,2 years of Net income before Depreciation earnings 13,3 bn.$/year or 4,8$/share. If excluding 2,4 bn.$ $ expenses at Q4 for litigation settlements and product liabilities expenses earnings would be 15,7 bn.$ or 5,7$/sh. which leads to 7,7 years. Companies shares market evaluation is a bit highly evaluated. Share profitability (Share market price/Net income before Depreciation) is 8,8% which is average.

Company pays 0,61$/share/quarter dividend or ~3,8% dividend yield which is quite good, with dividend payout ratio ~43% which is a bit high.

Analysis source: Jonson&Jonson 2012 1Q financial results

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.