Common-Size Income Statement
Quarterly Data
Johnson & Johnson, common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-06-28), 10-Q (reporting date: 2026-03-29), 10-K (reporting date: 2025-12-28), 10-Q (reporting date: 2025-09-28), 10-Q (reporting date: 2025-06-29), 10-Q (reporting date: 2025-03-30), 10-K (reporting date: 2024-12-29), 10-Q (reporting date: 2024-09-29), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-10-01), 10-Q (reporting date: 2023-07-02), 10-Q (reporting date: 2023-04-02), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-02), 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
The common-size income statement analysis reveals a period of relative stability in gross margins contrasted by significant volatility in operating expenses and non-operating items. While core production costs remained consistent, strategic shifts in research and development and one-time divestiture events heavily influenced the bottom line over the observed period.
- Gross Profitability and Cost of Goods Sold
- Gross profit margins remained robust, generally fluctuating between 66% and 70% of sales. The cost of products sold showed minimal variance, typically hovering between 30% and 33%. A peak in gross margin was observed in July 2023 at 69.97%, corresponding with a period of lower production costs relative to revenue.
- Operating Expense Trends
- Selling, marketing, and administrative expenses exhibited moderate volatility, typically ranging from 23% to 28% of sales. Research and development (R&D) expenditures showed a more pronounced trend of intensification, particularly in late 2024, where costs peaked at 23.53% of sales in December 2024. This suggests a period of increased strategic investment in the product pipeline. Additionally, periodic in-process R&D impairments and restructuring charges created minor but recurring downward pressures on operating earnings.
- Operating Earnings Performance
- Operating earnings demonstrated a cyclical pattern, frequently fluctuating between 15% and 29%. A notable contraction occurred in December 2024, where operating earnings dropped to 15.91%, driven primarily by the aforementioned spike in R&D and administrative expenses. Recovery was observed in early 2025, with margins returning to the 28% range.
- Non-Operating Volatility and Net Income
- The "Other income (expense), net" line item introduced substantial volatility into the pre-tax earnings. Significant anomalies are evident, including a sharp decline of 33.22% in April 2023 and a substantial gain of 33.44% in March 2025. The most significant distortion in net earnings occurred in October 2023, where net earnings reached 121.91% of sales, almost entirely driven by a gain from discontinued operations totaling 101.72%. Excluding this extraordinary event, net earnings from continuing operations typically settled between 11% and 27% of sales.
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