Revenue Update: J&J, Medtronic, Stryker, and Boston Scientific

Qmed Staff

September 25, 2013

2 Min Read
Revenue Update: J&J, Medtronic, Stryker, and Boston Scientific

Johnson & Johnson's medical device segment is poised for significant growth, according to analysts. As a consumer healthcare products manufacturer, J&J manufacturers well-known brands like Listerine, Neutrogena, Band-Aids and Tylenol, However, the company's medical device, diagnostic and pharmaceutical divisions form a larger part of its core business.In 2012, J&J's medical device and diagnostics business provided approximately two-fifths of the company's total revenue. To achieve its current size, this division comprises a variety of different technologies.In total, medical devices and diagnostics pulled in revenues of $7.2 billion for 2012. This represents a year-over-year growth rate of 9.6%. While the company's pharmaceutical division pulled in slightly less at $7.0 billion, it did achieve stronger year-over-year growth of 11.7%. In total, pharmaceuticals comprise 39% of total J&J revenue (compared to 40% for medical devices and diagnostics).While best-known to consumers, J&J's consumer healthcare division pulled in $3.7 billion, comprising 21% of the company's total revenue. With strong competition and pricing pressures in the consumer market, J&J's consumer healthcare division only managed year-over-year growth of 1.1%.While the company's orthopedic segment experienced a boost last year with the acquisition of Synthes, the company has several products that help boost its top line. In total, the company's Synthes acquisition increased quarterly year-over-year revenue to $2.4 billion. Other products that helped boost growth included the company's speciality surgery products, disposable contact lenses and electrophysiology products.Compared to its peers, J&J is going strong. While J&J achieved revenues of $7.2 billion and 9.6% growth in 2012, arch rival Medtronic pulled in $4.1 billion, achieving lower year-over-year growth of 2%. For Boston Scientific, results were even worse: The Massachusetts-based manufacturer pulled in $1.8 billion in revenues, representing a 1% decrease in year-over-year growth. While Styrker landed revenues of $2.2, less than one third of J&J, the company was able to achieve strong year-over-year growth of 5% for 2012.For Boston Scientific, negative sales growth in the last quarter led to unprofitability. While the company is a major manufacturer of cardiology, endoscopy, neuromodulation and medical supply products, the company faces a decline in surgical produces for developing markets. In addition, a weakened economy in the United States and European austerity measures have cut into profits, forcing hospitals and insurers to pursue significant pricing discounts. On top of this, the company also introduced diagnostic devices that were slower than those of its rivals.For Medtronic, a strong portfolio of surgical products, diabetic products, spinal treatment devices, cardiovascular implants and neuromodulation products has been beneficial. That said, the company faces many of the challenges seen by Boston Scientific. In a high-competition, low-margin environment, achieving success can be difficult for even large players. Despite this bad news, Medtronic's recent purchase of Cardiocom (a remote pacemaker monitoring company) could help boost the company's finances.Despite recalls of its hip and spinal implants, Stryker has demonstrated strong growth in recent months. Since Stryker focuses on orthopedic markets, higher demand has been beneficial for this company.

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