Here’s How Rising Litigation Charges Are Impacting Johnson & Johnson’s Earnings

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Johnson & Johnson’s (NYSE:JNJ) litigation expenses are on the rise with several lawsuits for different products, including talc, hip-plant, and blood thinner among others, piling up. As a result, the company’s total expenses are rising, though the contribution of litigation expenses to total expenses is very low. Nevertheless, higher litigation expenses have been increasingly impacting the company’s EPS. You can view our interactive dashboard analysis ~ How Are Rising Litigation Charges Impacting Johnson & Johnson’s Earnings? ~ for more details.  In addition, you can see more of our data for Healthcare companies here.

Johnson & Johnson’s Litigation Expenses Are On The Rise

  • Johnson & Johnson’s litigation expenses have been on the rise over the past few years.
  • They grew from $141 million in 2015 to around $2.0 billion in 2018.
  • This represents an average growth rate of 197%.

Litigation Expenses Form A Small Portion of Johnson & Johnson’s Overall Expenses

  • Litigation expenses as a percentage of Johnson & Johnson’s total expenses has grown from 0.3% in 2015 to 3.0% in 2018.

With Growth In Revenues & Expenses, The Company’s Earnings Have Fluctuated In The Recent Years

  • Johnson & Johnson’s EPS has fluctuated in the past, and the lower figure of 2017, represents a higher tax amount in total expenses, amid tax reform.
  • EPS grew from $5.48 in 2015 to $5.93 in 2016, and fell to $0.47 in 2017 before rising again to $5.61 in 2018.

Johnson & Johnson’s EPS In The Recent Years Has Seen Higher Impact From Rising Litigation Charges.

  • Johnson & Johnson’s litigation expenses have been on a rise, while the number of shares have been declining, as the company has been repurchasing its shares.
  • With growth in litigation expenses, its impact on EPS has also increased.
  • The impact on EPS grew from $0.05 in 2015 to $0.73 in 2018, due to the litigation charges.

 

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