Jovial Johnson & Johnson: Fool by Numbers

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On Jan. 23, Johnson & Johnson (NYSE: JNJ) released full-year earnings for FY 2006. The numbers held few surprises:

• Revenues of $53.3 billion, and earnings per share of $3.73, were very close to expectations. Taking into account one-time items from its acquisition of Pfizer's (NYSE: PFE) consumer products division and the Guidant breakup fee, earnings per share were $3.76 for the year.
  

• Gross and operating margins declined slightly, but both are still very healthy, and nothing to complain about.
  

• Sales growth in the company's consumer products division was 7.5% overall, driven by 10.9% growth in international markets. That's very strong performance, especially considering that the acquisition of Pfizer's consumer-products business did not close until December.
  

• JNJ is the fifth-most rated stock in Motley Fool CAPS, with a solid four-star rating.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	FY 2006	FY 2005	Change
Sales	$53,330	$53,324	$50,514	5.6%
Net Profit	--	$11,053	$10,060	9.9%
EPS	$3.74	$3.73	$3.35	11.3%
Diluted Shares	--	2,961	3,003	(1.4%)

Get back to basics with a look at the income statement.

Margin Checkup

	FY 2006	FY 2005	Change*
Gross Margin	71.76%	72.38%	(0.62)
Operating Margin	24.66%	24.68%	(0.02)
Net Margin	20.73%	19.92%	0.81

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet and Cash Flow Highlights
There's no Band-Aid for this boo-boo: The company declined to provide either a balance sheet or a cash flow statement.

Learn the ways of the balance sheet. Then, find out why Fools always follow the money.

Related Companies:

• AstraZeneca (NYSE: AZN)
• Novartis (NYSE: NVS)
• Abbott Laboratories (NYSE: ABT)
• Boston Scientific (NYSE: BSX)
• Procter & Gamble (NYSE: PG)

Related Foolishness:

• Foolish Fundamentals: Margins
• Foolish Fundamentals: Enterprise Value
• Foolish Fundamentals: Free Cash Flow

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Johnson & Johnson is a Motley Fool Income Investor selection, while Pfizer is a Motley Fool Inside Value pick. Try any of our Foolish newsletters free for 30 days.

At the time of publication, Nathan Parmelee owned shares of Johnson & Johnson. Fool rules are here.