J&J. Good business. No longer an American one.

Johnson & Johnson results yesterday morning, prior to the market opening. A miss by the analyst community, yes, I am going to say that. Not by much, but top line beat expectations which was also pleasing. The company in many ways shares the same sort of characteristics that would attract you to say for instance the aforementioned Coca-Cola. Steady, giant, good brands, solid history, nothing flashy, just a good old product that you know. Innovating in their own way.

Quick summary: Sales of 16.6 billion US Dollars, profits of 2.8 billion Dollars which translated to 1 buck a share worth of earnings. That included special items, the company guided to around 5 Dollars for the full year. What struck me immediately was that group sales for the quarter had a massive bias shift to their international segment. On the consumer business side there was a 12.4 percent increase internationally, but a 8.5 percent fall in the US. Across all division international sales grew 15.9 percent whilst US sales were basically flat. The biggest sales growth (and perhaps this is currency related, 13.2 percent in local currency) in the international segment was in Europe, believe it or not. But Asia/Africa (one region for JnJ) grew at 14.1 percent (9.9 percent constant currency).

It really is a nice well spread business, with great brands and more importantly growing geographically. For those wanting to own another bellwether, I guess you do not need to look further than JnJ. Expectations have been set by the company for the year, next year I have seen suggestions that there could be around twelve to fifteen percent over the next twelve months in the price. Which is about the long term average returns (in fact slightly more) on the S&P 500. We continue to buy them at these levels.