1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
The Science of Hitting
The Science of Hitting
Articles (449) 

Bill Weldon's Final Shareholder Letter as CEO of J&J

March 14, 2012 | About:

Bill Weldon, who has been CEO at Johnson & Johnson for the past ten years, will relinquish his title as chief executive on April 26 to Alex Gorsky, who began his J&J career nearly 25 years ago. The company’s recently published 2011 Annual Report included Mr. Weldon’s final shareholder letter as CEO (link); here are some of the highlights:

Headwinds remain at JNJ, but are being addressed – “As 2011 came to a close, we moved through a turning point. The headwinds from patent expirations, tough portfolio choices, litigation matters and OTC product quality issues had been, or were being, addressed.”

2011 Results – “Johnson & Johnson returned to delivering operational sales growth in 2011. We grew adjusted earnings for the 28th consecutive year. Our worldwide sales were $65.0 billion, an increase of 5.6 percent… Approximately 70 percent of our sales were from products with No. 1 or No. 2 global market share positions. Approximately 25% of our sales were from products introduced in the past five years… We generated significant free cash flow of approximately $11.4 billion, maintained our AAA credit rating and increased the dividend to our shareholders for the 49th consecutive year.

Committed to research & development – “Our continued investments in research and development (R&D), equaling nearly $37 billion over the past five years, yielded nine major approvals for new pharmaceutical products in the United States—including Stelara and Simponi in immunology; Prezista and Intelence in HIV; Zytiga in oncology; and Xarelto in cardiovascular disease. The emphasis we place on R&D has also led to exciting innovations in our Medical Devices and Diagnostics (MD&D) and Consumer platforms, such as contact lenses, electrophysiology, advanced energy, biosurgicals, oral care and skin care.”

Investing to meet future demand – “Populations in the developed world are aging rapidly, and we consume more health care as we grow older. Global expansion and growth, though slower than a few years ago, also lead to growing demand for health care, especially in emerging markets. Our investments continue to be aligned with these market opportunities to address unmet medical needs. Cancers, mental health disorders, diabetes, heart disease, stroke, rheumatoid arthritis and HIV are all among the most significant diseases—and they are markets where today we either have leadership or are increasing investments to gain leadership.”

The future at J&J – “Alex is an experienced and disciplined leader who will take the reins of our company during a turbulent time for health care but a very promising time for Johnson & Johnson. I can assure you, our shareholders, that Johnson & Johnson will continue to shape and lead the future of health care.”

  • CEO Buys, CFO Buys: Stocks that are bought by their CEO/CFOs.
  • Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
  • Double Buys:: Companies that both Gurus and Insiders are buying
  • Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.

» Take a Free Trial of Premium Membership

About the author:

The Science of Hitting
I'm a value investor with a long-term focus. As it relates to portfolio construction, my goal is to make a small number of meaningful decisions a year. In the words of Charlie Munger, my preferred approach to investing is "patience followed by pretty aggressive conduct". I run a concentrated portfolio, with a handful of equities accounting for the majority of its value. In the eyes of a businessman, I believe this is sufficient diversification.

Rating: 4.4/5 (11 votes)


Clandy44 premium member - 5 years ago
This is a perfect example of an otherwise well run company that I would not buy the stock of or, if I can help it, buy its proprietary or over the counter products. It confounds me how this company has been unable to manufacture ingested products intended for relieving or mitigating illness and disease without repeated multi-plant snafus going to the integrity and safety of its products. So, I have low regard for Weldon and have put JNJ in the same "do not touch with a ten-foot pole" bucket as HPC, DELL, and other companies whose culture or operating/disclosure/accounting practices make them untouchables for me. Additional comment: news item in the WSJ reports that the Justice Department has rejected JNJ's offer to pay $1,000,000,000 to settle claims it promoted Risperdal for off-label uses.

Please leave your comment:

GuruFocus has detected 6 Warning Signs with Johnson & Johnson $JNJ.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by The Science of Hitting

User Generated Screeners

canidPE >50th percentile of INDUSTR
brucexoct 17 user defined screen
AngryQuality Growth cheap
EnjoylifeDad 1
punjanoot2007a academy+joe
kltan12LOW PB/PS
carlentValue - Short
carlentValue - Long
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat