Johnson and Johnson’s 1Q16 Estimates: Consumer Healthcare Segment
Johnson & Johnson's 1Q16 Results Are Coming Soon: What to Expect
JNJ’s Consumer Healthcare segment
Johnson & Johnson’s (JNJ) Consumer Healthcare segment includes the company’s baby care, oral care, skincare, over-the-counter products, women’s health, and wound care franchises. The segment is expected to have a positive growth in operational revenues during 1Q16.
Over-the-counter and skincare
JNJ’s over-the-counter franchise contributes ~29% of the segment’s sales, with key products for analgesics, allergy medications, and respiratory products. The company’s skincare franchise contributes ~25% of the segment sales. Aveeno and Neutrogena are big growth contributors for this franchise. Overall, the franchise has been affected by lower sales in China following strong competition.
The company’s skincare franchise contributes ~25% of the segment sales. Aveeno and Neutrogena are big growth contributors for this franchise. Overall, the franchise has been affected by lower sales in China following strong competition.
Baby care and oral care
JNP’s baby care franchise contributes nearly 16% of the segment’s sales. The launches of new baby care products have also contributed to revenue growth, which has been partly offset by lower sales of cleansers and creams, due to increased competition in China.
The company’s oral care franchise contributes ~11% of the segment’s sales. JNJ has added few new products under the Listerine brand and has carried out few marketing campaigns that will likely fuel growth in oral care as well.
Women’s health, wound care, and other franchises
Women’s health contributes ~9% of the segment’s sales. This franchise has shown an improving performance in and outside US markets over the past few quarters, following the launch of new products and successful marketing campaigns.
Wound care contributes ~7% of this segment’s sales. Revenues for this franchise are declining, however, due to the divestiture of the Benecol brand outside US markets, in a deal that was completed in November 2014.
In order to divest risk, you might consider ETFs like the iShare US Pharmaceuticals ETF (IHE), which has 11.3% of its portfolio in JNJ, or the Fidelity MSCI Healthcare Index ETF (FHLC), which has 9.9% of its portfolio in JNJ. FHLC also has 3.9% of its total assets in Allergan (AGN), 3.0% in AbbVie (ABBV), and 4.4% in Gilead Sciences (GILD).
Now let’s take a look at JNP’s expected profitability.
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