Johnson & Johnson (NYSE:JNJ)

Gross Profit Margin

The gross profit margin exhibits a general upward trend from 65.58% in early 2020 through subsequent periods, reaching a peak of 69.2% by the end of 2023. This indicates an overall improvement in cost efficiency relative to revenue. However, slight fluctuations are noted in 2024 and early 2025, where the margin stabilizes around 68.3% to 69.07% before dipping slightly to 68.3% in the last reported quarter.

Operating Profit Margin

Operating profit margin shows moderate variability but remains relatively stable within the range of approximately 23.4% to 25.6%. After an initial period of growth peaking at 25.61% in late 2023, the margin demonstrates slight declines in 2024 and early 2025, suggesting possible pressure on operating expenses or revenue mix changes during these intervals.

Net Profit Margin

The net profit margin displays significant volatility across the reported quarters. Although it generally moves between 17.8% and 22.3% through much of 2020 to early 2022, a pronounced spike occurs in late 2023 with values exceeding 39%, reaching as high as 44.92%. This surge likely reflects extraordinary items or non-recurring gains. Following this peak, the margin experiences a sharp contraction in 2024, falling to approximately 15.8%, indicating a return to normalized profit levels or increased costs and expenses relative to revenue.

Return on Equity (ROE)

Return on equity shows a positive trend from 23.25% in early 2020, rising through the end of 2023, where it surpasses 50% and peaks at 54.95%. This marked increase suggests improved profitability and efficient use of shareholders’ equity during this period. However, ROE declines significantly in 2024, falling back to around 20%, before a modest recovery to 27.92% in the last quarter reported, implying variable profitability or changes in equity structure.

Return on Assets (ROA)

The return on assets follows a pattern somewhat consistent with ROE but with smaller magnitude changes. From approximately 8.4% in early 2020, ROA increases steadily, peaking above 22% by late 2023. This rise indicates enhanced asset utilization to generate profit. Similar to ROE, ROA experiences a decline in 2024 to near 7.8%, with a partial rebound to 11.26% by early 2025, reflecting fluctuations in asset productivity or earnings quality.

The analysis of the quarterly financial data reveals distinct trends in key metrics over the observed periods.

Gross Profit

Gross profit exhibits considerable fluctuation throughout the quarters, with notable peaks and troughs. Starting at 13,629 million US dollars in March 2020, it experienced a decline in the following quarter before recovering and reaching a peak of 16,849 million US dollars in December 2021. Subsequent quarters show a downward trend with some recovery phases, culminating in 14,536 million US dollars by March 2025. This pattern suggests volatility in profitability that may be influenced by varying cost structures or market conditions.

Sales to Customers

Sales demonstrate a somewhat cyclical pattern but maintain an overall upward trajectory until the beginning of 2022. Sales increased from 20,691 million US dollars in March 2020 to a high of 24,804 million US dollars in December 2021, indicating strong revenue growth during this period. However, after this peak, sales experienced a declining trend with fluctuations, ending at 21,893 million US dollars in March 2025. This suggests potential challenges in maintaining revenue growth post 2021.

Gross Profit Margin

The gross profit margin, calculated as a percentage, shows a steady and consistent increase across the quarters where data is available. Starting from approximately 65.58% in late 2020, the margin rose gradually to a range above 68% by early 2023 and peaked near 69.2% by late 2023. It slightly declined afterward but remained above 68% towards the end of the period. This steady increase in margin despite fluctuations in gross profit and sales indicates improving efficiency or favorable cost management within the company during the analyzed period.

Operating Earnings

Operating earnings exhibit notable volatility over the examined periods. The values show an initial peak in March 2020 at 5,788 million US$, followed by a decline to 3,990 million US$ in June 2020. Thereafter, earnings mostly recover, reaching highs above 6,000 million US$ in various quarters of 2021 and 2022. However, a downward trend is observed again in the later part of 2023 and into 2024, with earnings dropping to around 3,582 million US$ by December 2024, before a moderate recovery to 6,182 million US$ in March 2025. This pattern reflects periods of both growth and contraction, suggesting fluctuating operational performance or external factors impacting profitability.

Sales to Customers

Sales figures also display fluctuations but within a narrower range compared to operating earnings. After a decline from 20,691 million US$ in March 2020 to 18,336 million US$ in June 2020, sales generally trend upward across subsequent quarters, peaking several times near or above 24,000 million US$. Notably, sales peak around 24,804 million US$ in December 2021 and maintain relatively stable levels through parts of 2022. Sales volume slightly decreases in early 2023 and fluctuates marginally thereafter, ending at 21,893 million US$ in March 2025, which is below earlier peak figures. The data indicates overall growth with periods of contraction possibly due to market or economic conditions.

Operating Profit Margin

Operating profit margin data is partially available, beginning from December 2020. Margins generally range from approximately 23.4% to 25.6%, indicating stable profitability relative to sales. The margin increases from 23.6% in December 2020 to a peak of 25.61% in October 2023, showing enhanced efficiency or cost control over that period. Margins slightly decline afterward, dropping to around 23.42% by March 2025. This trend reflects consistent profitability with slight variations potentially attributable to changes in cost structure or sales mix.

Summary

The financial data reveals cyclicality and fluctuations in quarterly performance across earnings, sales, and profit margins. Operating earnings are more volatile compared to sales, which show a more stable, though slightly fluctuating, upward trend over the period. Operating margins indicate relatively steady operational efficiency despite some recent declines. Overall, the data suggests resilience with intermittent challenges impacting short-term earnings and sales performance.

Net Earnings (Loss)

The net earnings show considerable fluctuations over the analyzed periods. Starting at 5,796 million USD in March 2020, there is a decline through mid-to-late 2020 reaching a low point of 1,738 million USD in December 2020. A strong recovery occurs in 2021, with earnings generally rising above 4,000 million USD by the year-end. However, 2023 shows unusual volatility, switching from a significant loss (-68 million USD) in April 2023 to an exceptional peak of 26,028 million USD in October 2023, followed by a drop in subsequent quarters. The most recent quarters in 2024 and early 2025 indicate a downward trend, ending at 10,999 million USD in March 2025.

Sales to Customers

Sales figures appear relatively stable with modest growth over the five-year horizon. They begin near 20,691 million USD in early 2020, dip slightly during 2020, then recover and maintain levels predominantly between 21,000 and 24,000 million USD. The highest sales occur in late 2024 (22,520 million USD), although the variation over time is not dramatic. There is no evident strong upward or downward trend but rather consistent sales performance.

Net Profit Margin

Net profit margin data is missing for early periods but is reported from December 2020 onward. Margins generally range from approximately 17.8% to 22.3% during 2021-2022, indicating relatively healthy profitability. In 2023, the margin drops significantly to around 13.77%-14.52%, coinciding with the notable volatility in net earnings that year. An exceptional increase in margin is seen in late 2023 and early 2024, reaching levels around 39.58% to 44.92%, reflecting the extraordinary net earnings reported in those quarters. The net profit margin falls back to mid-teens in early 2025, suggesting a normalization after the spike.

Overall Trends and Insights

The data reveals a pattern of relatively stable sales accompanied by fluctuating profitability. Net earnings and profit margins experienced significant volatility especially in 2023, suggesting extraordinary or non-recurring events affecting profitability. Despite the sales stabilization, profitability does not consistently correlate with the sales trend, implying variability in cost structures, operational efficiency, or extraordinary items impacting net income. The exceptional spike in net earnings and profit margin in late 2023 and early 2024 stands out as an anomaly that should be investigated further for its underlying causes. The return to lower margins and earnings levels afterward indicates a reversion to more typical earnings performance.

The net earnings exhibit significant variability across the observed quarters. Initially, earnings show a marked decline from 5796 million USD in March 2020 to a low of 1738 million USD in December 2020. Thereafter, an upward trend is observed with earnings often recovering to levels above 4000 million USD, peaking notably at 26028 million USD in October 2023, an exceptional spike relative to other periods. However, this surge is followed by a decline, with earnings stabilizing around the 3000 to 4000 million USD range towards the most recent quarters in 2024 and early 2025.

Shareholders' equity demonstrates a general upward trajectory over the period. The equity increased from approximately 61.3 billion USD in the first quarter of 2020 to just over 78.1 billion USD in March 2025. Despite some fluctuations, including reductions in certain quarters such as in April 2023 and December 2023, the overall long-term trend points to growth in equity value, reflecting a strengthening capital base.

Return on Equity (ROE) data, starting from April 2021, indicates periods of strong profitability relative to equity, consistently maintaining values above 20%, with occasional peaks above 50%. The highest ROE values occur in the latter part of 2023 and early 2024, aligning with the quarters showing the peak net earnings. However, a subsequent decrease in ROE is evident towards the end of the observed period, signaling reduced earnings efficiency in the most recent quarters despite the higher equity base.

Net Earnings Trend

Sharp decline in early 2020, followed by recovery. Exceptional spike in Oct 2023, then normalization around 3000-4000 million USD.

Shareholders' Equity Trend

Steady increase with some quarterly fluctuations, moving from ~61.3 billion to ~78.1 billion USD by Q1 2025.

Return on Equity (ROE)

Generally strong profitability with ROE above 20%, peaking over 50% around late 2023, then declining towards end of period.

Correlation and Insights

Periods of high net earnings correspond with elevated ROE values, indicating profitable capital use. The surge in earnings and ROE during late 2023 suggests either extraordinary items or operational improvements. Despite fluctuations, the equity growth supports the company's financial stability.

The analysis of the quarterly financial data reveals several noteworthy trends across net earnings, total assets, and return on assets (ROA) over the observed periods.

Net Earnings (Loss)

Net earnings exhibit significant fluctuation throughout the periods. Initially, net earnings showed a peak of 5,796 million USD in March 2020 but experienced a steep decline during the middle of 2020, falling to 1,738 million USD by December 2020. The subsequent quarters introduced some recovery, with notable increases in early 2021, reaching highs above 6,000 million USD in April and July of 2021.

The earnings again experienced volatility in late 2021 and through 2022, with values ranging mostly between approximately 3,500 million USD to 5,100 million USD, before dropping sharply to a loss of 68 million USD in April 2023. Following this loss, a very strong rebound occurred in the subsequent quarter with net earnings soaring to 5,144 million USD in July 2023 and further peaking dramatically to 26,028 million USD in October 2023. This spike is an outlier compared to other periods and suggests either an extraordinary gain or accounting adjustment.

Following this exceptional spike, net earnings moderated, with quarterly amounts fluctuating between 2,600 million USD and 4,700 million USD through the end of 2024 and into the first quarter of 2025. Overall, the net earnings indicate a pattern of volatility with occasional extraordinary fluctuations that merit further investigation for their underlying causes.

Total Assets

Total assets demonstrated a general upward trend over time, increasing from approximately 155 billion USD in March 2020 to near 196 billion USD by April 2023. This steady growth suggests ongoing asset acquisition or appreciation, reflecting possible investments or operational expansion during this timeframe.

However, a marked decline occurred after April 2023, with total assets falling sharply to approximately 166 billion USD by October 2023. In the subsequent periods, total assets showed modest recovery and oscillated between approximately 167 billion USD and 193 billion USD through March 2025.

The sharp decline followed by partial recovery indicates potential divestitures or significant asset write-downs in mid-2023, with partial restoration or acquisition activities resuming afterward.

Return on Assets (ROA)

ROA values were not available for the initial periods but became consistently reported from the end of 2020 onward. Early ROA figures ranged between approximately 8.4% and 11.5% through 2021 and early 2022, indicating stable profitability relative to asset base.

A notable decrease in ROA occurred by early 2023, falling from roughly 9.6% to 6.5% and then 6.8%, coinciding with the loss reported in net earnings during this period. This indicates reduced efficiency or profitability in asset utilization during the early months of 2023.

A striking increase in ROA to values exceeding 20%, peaking above 22% in late 2023, aligns temporally with the extraordinary net earnings spike, suggesting these extraordinary results strongly enhanced asset profitability.

Following this peak, ROA normalized back to a range between approximately 7.8% and 11.3% by the first quarter of 2025, reflecting restoration to more typical operating efficiency levels.

In summary, the data suggest a cycle of volatility in net earnings and total assets, punctuated by extraordinary gains and corresponding ROA spikes. The general asset growth trend contrasts with intermittent declines, highlighting episodic restructuring or asset adjustments. The connection between significant net earnings fluctuations and ROA highlights the sensitivity of profitability measures to exceptional financial events during the analyzed periods.