Behind the Headline: Johnson & Johnson's Fourth-Quarter Earnings Decoded
Johnson & Johnson made headlines today after reporting a 37% increase in earnings in its Q4 numbers, but looking beyond the headlines shows a more nuanced picture. Taking into consideration the $800 million impairment charge the company was forced to take at this time last year because of its defective hip replacements, its adjusted earnings per share came out to $1.24, versus $1.19 last year. However, with revenue also up 4.5%, the company was still able to beat estimates on both the top and bottom line.
In this video, however, Motley Fool health-care analyst David Williamson tells investors that the real story he sees here is the company's low 2014 guidance, which may have been the cause of the high selling volume the stock experienced today. David breaks the company down for investors by department, and shows why he thinks this low guidance could be sandbagging on JNJ's part.
Are there other great ways to invest in the future of health care?
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In The Motley Fool's brand-new free report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.
The article Behind the Headline: Johnson & Johnson's Fourth-Quarter Earnings Decoded originally appeared on Fool.com.David Williamson owns shares of Johnson & Johnson. The Motley Fool recommends and owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.