Johnson & Johnson (Johnson & Johnson) Operating Income

: $23,102 Mil (TTM As of Dec. 2023)

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Johnson & Johnson's Operating Income for the three months ended in Dec. 2023 was $4,307 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $23,102 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Johnson & Johnson's Operating Income for the three months ended in Dec. 2023 was $4,307 Mil. Johnson & Johnson's Revenue for the three months ended in Dec. 2023 was $21,395 Mil. Therefore, Johnson & Johnson's Operating Margin % for the quarter that ended in Dec. 2023 was 20.13%.

Good Sign:

Johnson & Johnson operating margin is expanding. Margin expansion is usually a good sign.

Johnson & Johnson's 5-Year average Growth Rate for Operating Margin % was 0.50% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Johnson & Johnson's annualized ROC % for the quarter that ended in Dec. 2023 was 12.24%. Johnson & Johnson's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 102.83%.

Johnson & Johnson Operating Income Historical Data

The historical data trend for Johnson & Johnson's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Johnson & Johnson Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

20,970.00

19,733.00

20,943.00

21,013.00

22,009.00

Johnson & Johnson Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Operating Income																7,001.00	6,824.00	5,898.00	4,307.00	6,073.00

Johnson & Johnson Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $23,102 Mil.

Johnson & Johnson (NYSE:JNJ) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Johnson & Johnson's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	17228 * ( 1 - 14.38% )	/	( (119565	+	121507)	/ 2 )
=	14750.6136	/	120536
=	12.24 %

where

	Invested Capital		(Q: Sep. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	166061	-	37163	-	( 23511	-	max(0, 44370	-	53703	+	23511	))
=	119565

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	167558	-	38838	-	( 22927	-	max(0, 46282	-	53495	+	22927	))
=	121507

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

Johnson & Johnson's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2023		Q: Dec. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	19908	/	( ( (18821 + max(-10308, 0))	+	(19898 + max(-16777, 0)) )	/	2 )
=	19908	/	( ( 18821	+	19898 )	/	2 )
=	19908	/	19359.5
=	102.83 %

where Working Capital is:

	Working Capital		(Q: Sep. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(14798	+	11198	+	4196)	-	(37163	+	0	+	3337)
=	-10308

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(14873	+	11181	+	0)	-	(38838	+	0	+	3993)
=	-16777

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Johnson & Johnson's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	4307	/	21395
	=	20.13 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Johnson & Johnson Operating Income Related Terms

Thank you for viewing the detailed overview of Johnson & Johnson's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

Johnson & Johnson (Johnson & Johnson) Business Description

Industry

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Address

One Johnson and Johnson Plaza, New Brunswick, NJ, USA, 08933

Website

https://www.jnj.com

Johnson & Johnson is the world's largest and most diverse healthcare firm. Three divisions make up the firm: pharmaceutical, medical devices and diagnostics, and consumer. The drug and device groups represent close to 80% of sales and drive the majority of cash flows for the firm. The drug division focuses on the following therapeutic areas: immunology, oncology, neurology, pulmonary, cardiology, and metabolic diseases. The device segment focuses on orthopedics, surgery tools, vision care, and a few smaller areas. The last segment of consumer focuses on baby care, beauty, oral care, over-the-counter drugs, and women's health. The consumer group is being divested in 2023 under the new name Kenvue. Geographically, just over half of total revenue is generated in the United States.

Executives

Timothy Schmid	officer: EVP, WW Chair, MedTech	ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
William Hait	officer: See Remarks	ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Peter Fasolo	officer: VP, Worldwide Human Resources	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Kathryn E Wengel	officer: EVP, Chief GSC Officer	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
John C Reed	officer: EVP, Pharmaceuticals R&D	ONE JOHNSON & JOHNSON PLAZA, WHQ 2134, NEW BRUNSWICK NJ 08933
James D. Swanson	officer: EVP, Chief Information Officer	ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Paula A Johnson	director	22 CHERRY HILL DRIVE, DANVERS MA 01923
Joseph J Wolk	officer: Exec VP, CFO	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Ashley Mcevoy	officer: EVP, WW Chair, Medical Devices	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Jennifer L Taubert	officer: EVP, WW Chair, Pharmaceuticals	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Robert J Decker	officer: Controller, CAO	ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Thibaut Mongon	officer: Exec VP, WW Chair, Consumer	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Elizabeth Forminard	officer: Executive VP, General Counsel	ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Darius Adamczyk	director	855 S. MINT STREET, CHARLOTTE NC 28202
Vanessa Broadhurst	officer: EVP, Global Corp Aff.	ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933