JNJ’s 2012 Revenue Shows Strong Growth in Orthopedics

Last year, Johnson & Johnson scored big with the acquisition of Synthes (now DePuy Synthes), the European orthopedic giant. The $21.3 billion buy is proving to be worth its weight in gold, as JNJ’s 2012 earnings report shows a 6.4 percent growth in overall medical devices revenue, and a whopping 34.3 percent rise in orthopedic income.

Synthes’ boost no doubt will help ease the blow of a 13.2 percent drop in cardiovascular revenue. Also in decline were the company’s diagnostics (down 4.4 percent), diabetes (down 4.4 percent) and surgical care (down 2.3 percent) units. The company did well, however, in specialty surgery and vision care, with a rise in revenue of 7.2 percent and 2.7 percent respectively.

2012 truly was a milestone for the medical device and diagnostics unit, which pulled in $27.4 billion. This puts the unit ahead of JNJ’s pharmaceuticals unit by more than $2 billion in revenue. Devices and diagnostics grew by 6.3 percent, while pharmaceuticals checked in at 4 percent growth. Of course, the spike most likely is attributable to the Synthes buy, but the size of the acquisition promises to keep that trend going.

The cost of recalls, litigation and other major expenses tend to play a significant role in major companies’ revenues year to year. In the fourth quarter, JNJ took an $800 million hit in litigation costs for is recalled ASR metal-on-metal hip implants; the company currently is facing lawsuits over its Pinnacle hip implants.

JNJ is based in New Brunswick, N.J., while DePuy Synthes is located in West Chester, Pa.