Domain: Finance
Question:
Compare Johnson & Johnson's annualized financial performance from the first half of 2025 to its updated guidance for FY 2025, with a focus on the following measures: adjusted operational sales growth %, operational sales, reported sales, adjusted diluted EPS (operational) growth, and adjusted diluted EPS (reported) growth. (When displaying dollar amounts, round to the nearest million, except for per share data, which should be presented rounded to 2 decimal places. Round percentages to one decimal place.)

Organize the output into the following sections:

# Conclusion

Provide a 3-4 sentence summary that concludes if JNJ's updated guidance for FY 2025 is consistent with its performance YTD, with further support in the below sections. Additional instructions are provided below: 

Assessments by metric: To gauge whether a given metric's updated guidance is "consistent" with YTD performance, assume that annualized YTD performance must be within (or superior to) the ranges that JNJ specified in its latest guidance. (For example, if the company achieved 5% adjusted operational sales growth in 1H 2025, and they've guided for FY 2025 operational sales growth between 4% and 6%, the output should conclude that the company is on track to meet that target. However, if a metric includes guidance for both YoY growth % and a FY dollar amount, the company may be considered on-track if its annualized YTD performance satisfies at least one of those ranges. To the extent such discrepancies exist, comment on at least one potential driver that warrants further consideration) 

Assessments by metric category: To conclude if the company is on track to meet its overall revenue guidance, it must (i) have a YTD adjusted operational sales growth that meets or exceeds its respective FY target, and (ii) have at least one of the other revenue metrics on track to hit its target as well. For profitability, the company's YTD adjusted diluted EPS (operational) must meet or exceed either of its the specified ranges. 

Overall Assessment for JNJ: If JNJ passes the revenue and profitability assessments, then conclude that JNJ is on track to meet its overall guidance. Otherwise, the output should confirm the company is not on track.  

# Revenue Guidance

After annualizing YTD adjusted operational sales growth % (vs prior year), operational sales, and reported sales, explain their respective variances relative to the company's latest FY guidance. (Note: if an adjusted metric includes any unique items in excess of $1B, provide a normalized comparison to the company's FY guidance that removes such impacts.)

# Profitability Guidance

Follow the same procedure noted in the Revenue Guidance section for adjusted diluted EPS growth (operational) and adjusted diluted EPS (reported). 

(Note: adjusted diluted EPS (operational) was $5.54 and $9.99 for 1H 2024 and FY 2024, respectively. For FY 2024, adjusted diluted EPS (reported) was $9.98.)

Expected points in a correct answer:
Concludes Johnson & Johnson's financial performance for the first half of 2025 suggests the company is not on track to meet its current FY guidance.
States the company's reported sales are set to underperform its respective ranges.
States the company's operational sales are set to underperform its respective ranges.
States the company's adjusted operational sales growth % is set to underperform its respective range.
Concludes the company did not pass its revenue assessment.
Concludes the company is not on track to meet its overall guidance.
States Johnson & Johnson did pass its profitability assessment.
States the results paint a mixed picture in terms of JNJ's ability to meet its financial objectives.
Identifies JNJ's reported sales for 1H 2024 were $43,830M.
Identifies JNJ's reported sales for 1H 2025 were $45,636M.
Calculates the YoY variance in reported sales as $1,806M ± 5M.
Calculates the YoY variance in reported sales as 4.1% ± .01%.
States the annualized reported sales growth of 4.1% trails its respective FY guided range of 5.1% - 5.6%.
Calculates the company's annualized YTD 2025 reported sales of $91,272M ± 10M.
States the annualized reported sales of $91,272M falls short of the company's FY guidance between $93,200M and $93,600M.
Concludes that JNJ is not on track to meet its target for reported sales.
States that operational sales can be derived by using the difference between 1H 2025 reported sales growth of 4.1% and 1H 2025 operational sales growth of 4.4%.
Calculates the company's operational sales were approximately $45,759M ± 20M during the first half of 2025.
Calculates an annualized FY projection for operational sales of approx. $91,517M (+/- $1M).
States the annualized projection of $91,517M falls short of the company's guidance between $92,700M and $93,100M.
Identifies the 1H YoY growth for operational sales as 4.4%.
States the 1H YoY growth of 4.4% fails to satisfy its respective range of 4.5% - 5.0%.
Concludes that operational sales does not seem to be on track.
Identifies YoY adjusted operational sales growth was 3.1% ± .1% during the first half of 2025.
States the annualized growth of 3.1% falls below the company's FY guidance for 3.2% - 3.7%.
Identifies that from 1H 2024 to 1H 2025, adjusted diluted EPS (Reported) held flat at $5.53.
Calculates an implied annualized FY growth projection of 0.0% for adjusted diluted EPS (Reported).
States the 0.0% growth projection is significantly below the company's FY guidance of 8.2% - 9.2%.
Calculates the implied FY projection for adjusted diluted EPS (Reported) is $11.06 ± .05 on an absolute dollar basis.
States the $11.06 projection surpasses its respective guidance for $10.80 - $10.90.
Concludes JNJ is considered on track to hit its guidance for reported adj. diluted EPS.
Provide one potential driver as to why a given metric may not satisfy both of its guided ranges.
Identifies adjusted diluted EPS (operational) dropped from $5.54 in 1H 2024 to $5.52 in 1H 2025.
Calculates an implied annualized FY growth projection of 0.0% for adjusted diluted EPS (operational).
States the 0.0% growth projection is significantly below the company's FY guidance for 6.5% - 7.5%.
Calculates the implied FY projection for adjusted diluted EPS (operational) is $11.04 on an absolute dollar basis.
States the $11.04 projection surpasses its respective guidance for $10.63 - $10.73.
Concludes JNJ is considered on track to hit its guidance for operational adj. diluted EPS.
States the reported and operational measures for adjusted diluted EPS did not require further adjustments.
Concludes that JNJ is not on track to meet its target for adjusted operational sales growth %.