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Johnson & Johnson
In 2024, Johnson & Johnson (J&J) reported $89B in annual revenue with the following breakdown:
- Pharma (Innovative Medicine) (64%)
- MedTech (36%)
On the expense side, J&J reported:
- Cost of Revenue (31%)
- Sales and General Administration (26%),
- R&D (19%),
Resulting in $14B Net Income (16% of revenue) after Tax and other expenses. J&J is a unique company, as it encompasses two highly mature businesses (Pharma, MedTech), each of which is substantial enough to rank among the top two in its corresponding sector. This also explains why J&J has a lower cost of revenue and higher R&D spending compared to other medical device companies, as most of its business comes from the pharma division, which has higher margins.
Abbott
In 2024, Abbott reported $42B in annual revenue with the following breakdown:
- Medical Devices (45%)
- Diagnostics (23%)
- Nutritional (20%)
- Pharmaceuticals (12%)
On the expense side, Abbott reported:
- Cost of Revenue (42%)
- SG&A (28%)
- R&D (7%)
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Resulting in $7B income (17%). Abbott also received an additional $6.4B in Tax benefits that boosted its net income to $13.4B (32%). This explains why Abbott, the most valuable medical device company, has a lower P/E ratio compared to other medical device companies, as its effective P/E is much higher.
Thermo Fisher
In 2024, Thermo Fisher Scientific reported $42.9B in annual revenue with the following breakdown:
- Lab Products and Pharma Services (52%)
- Life Sciences Solutions (21%)
- Analytical Instruments (17%)
- Specialty Diagnostics (10%)
On the expense side, Thermo Fisher reported
- Cost of Revenue (58%)
- SG&A (20%)
- R&D (3%)
Resulting in $6.6B Net Income (15% of revenue) after Tax. Compared to other major medical device companies, Thermo Fisher has a lower gross margin due to the nature of its products. Still, the company compensates for it by keeping its operation very lean.
Views are my own. Content is all public data intended to be educational and not financial advice. I encourage readers to do their research.
