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Johnson & Johnson Reports 2016 Third-Quarter Results sales of $17.8 billion

Published

8 years ago

October 18, 2016

NEW BRUNSWICK, N.J., (FNN NEWS) By Johnson & Johnson — Johnson & Johnson (NYSE: JNJ) today announced sales of $17.8 billion for the third quarter of 2016, an increase of 4.2% as compared to the third quarter of 2015. Operational sales results increased 4.3% and the negative impact of currency was 0.1%. Domestic sales increased 6.7%. International sales increased 1.5%, reflecting operational growth of 1.7% and a negative currency impact of 0.2%. Excluding the net impact of acquisitions, divestitures and hepatitis C sales, on an operational basis, worldwide sales increased 5.9%, domestic sales increased 7.3% and international sales increased 4.2%.^* Operations in Venezuela negatively impacted worldwide operational sales growth by 30 basis points, and international sales growth by 70 basis points.

Net earnings and diluted earnings per share for the third quarter of 2016 were $4.3 billion and $1.53, respectively. Third quarter 2016 net earnings included after-tax intangible amortization expense of approximately $0.2 billion and a charge for after-tax special items of approximately $0.2 billion. Third quarter 2015 net earnings included after-tax intangible amortization expense of approximately $0.4 billion and a charge for after-tax special items of approximately $0.4 billion. Excluding after-tax intangible amortization expense and special items, adjusted net earnings for the current quarter were $4.7 billion and adjusted diluted earnings per share were $1.68, representing increases of 12.2% and 12.8%, respectively, as compared to the same period in 2015.^* On an operational basis, adjusted diluted earnings per share also increased 12.8%.^*A reconciliation of non-GAAP financial measures is included as an accompanying schedule.

“Our third-quarter results reflect the success of our new product launches and the strength of our core businesses, driven by strong growth in our Pharmaceuticals business. With a number of regulatory approvals, several new drug application submissions and new breakthrough therapy designations from the FDA, we are increasingly confident in our pipeline expectation of filing 10 new pharmaceutical products between 2015 and 2019, each with revenue potential over $1 billion,” said Alex Gorsky, Chairman and Chief Executive Officer. “Our broad-based business model, strategic investments and talented colleagues position us well for continued leadership in health care.”

The Company maintained its sales guidance for the full-year 2016 of $71.5 billion to $72.2 billion. Additionally, the Company increased its adjusted earnings guidance for full-year 2016 to $6.68 – $6.73 per share.*

Worldwide Consumer sales of $3.3 billion for the third quarter 2016 represented a decrease of 1.6% versus the prior year, consisting of an operational increase of 0.1% and a negative impact from currency of 1.7%. Domestic sales increased 1.1%; international sales decreased 3.3%, which reflected an operational decrease of 0.6% and a negative currency impact of 2.7%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales decreased 0.4%, domestic sales decreased 1.5% and international sales increased 0.3%^*. Operations in Venezuela negatively impacted worldwide Consumer operational sales growth by 110 basis points and international sales growth by 180 basis points.

Worldwide operational results, excluding the net impact of acquisitions and divestitures, were negatively impacted by lower trade inventory levels, primarily in the U.S. Positive contributors to Consumer operational sales results included LISTERINE^® oral care products; AVEENO^® skin care products and digestive health products and international smoking aids in over-the-counter products.

Worldwide Pharmaceutical sales of $8.4 billion for the third quarter 2016 represented an increase of 9.2% versus the prior year with an operational increase of 9.0% and a positive impact from currency of 0.2%. Domestic sales increased 11.8%; international sales increased 5.4%, which reflected an operational increase of 5.0% and a positive currency impact of 0.4%. Excluding the net impact of acquisitions, divestitures and hepatitis C sales, on an operational basis, worldwide sales increased 10.7%, domestic sales increased 13.0% and international sales increased 7.0%.^*

Worldwide operational results, excluding the net impact of acquisitions, divestitures and hepatitis C sales, were driven by new products and the strength of core products. Strong growth in new products include IMBRUVICA^® (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, a type of blood or lymph node cancer; DARZALEX^®(daratumumab), for the treatment of patients with multiple myeloma; and XARELTO^® (rivaroxaban), an oral anticoagulant.

Additional contributors to operational sales growth included STELARA^® (ustekinumab), REMICADE^®(infliximab) and SIMPONI^®/SIMPONI ARIA^® (golimumab), biologics approved for the treatment of a number of immune-mediated inflammatory diseases; and INVEGA^®SUSTENNA^®/XEPLION^®/TRINZA^® (paliperidone palmitate), long-acting, injectable atypical antipsychotics for the treatment of schizophrenia in adults.

During the quarter, the U.S. Food and Drug Administration (FDA) approved INVOKAMET^® XR (canagliflozin/metformin HCl extended-release) for first-line treatment of adults with type 2 diabetes, and STELARA^® (ustekinumab) for the treatment of adults with moderately to severely active Crohn’s disease. The Committee for Medicinal Products for Human Use issued a positive opinion recommending approval of STELARA^® for the treatment of adults with moderately to severely active Crohn’s disease.

Additionally, regulatory applications for approval were submitted to the FDA and European Medicines Agency (EMA) for DARZALEX^® in combination with standard-of-care regimens for patients with multiple myeloma who have received at least one prior therapy. DARZALEX^® also received Breakthrough Therapy Designation from the FDA for this pending indication. The FDA also granted Breakthrough Therapy Designation to esketamine for major depressive disorder with imminent risk for suicide. Regulatory applications for approval were also submitted to the FDA for sirukumab in rheumatoid arthritis, and to EMA for a darunavir-based single tablet regimen for the treatment of HIV-1.

Worldwide Medical Devices sales of $6.2 billion for the third quarter 2016 represented an increase of 1.1% versus the prior year consisting of an operational increase of 0.7% and a positive currency impact of 0.4%. Domestic sales increased 1.4%; international sales increased 0.7%, which reflected an operational decline of 0.2% and a positive currency impact of 0.9%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 3.1%, domestic sales increased 2.3% and international sales increased 3.9%.^*

Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by electrophysiology products in the Cardiovascular business; endocutters and energy in the Advanced Surgery business; ACUVUE^® contact lenses in the Vision Care business; and joint reconstruction and trauma products in the Orthopaedics business.

During the quarter, a definitive agreement was announced to acquire Abbott Medical Optics, a wholly-owned subsidiary of Abbott Laboratories, for $4.325 billion in cash. Acclarent announced the U.S. launch of ACCLARENT AERA^™, the first balloon dilation intervention approved by the FDA for Eustachian Tube Dysfunction.

About Johnson & Johnson

Caring for the world, one person at a time, inspires and unites the people of Johnson & Johnson. We embrace research and science – bringing innovative ideas, products and services to advance the health and well-being of people. Our approximately 126,900 employees at more than 250 Johnson & Johnson operating companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.

^* Operational sales growth excluding the net impact of acquisitions, divestitures and hepatitis C sales, as well as adjusted net earnings, adjusted diluted earnings per share and operational adjusted diluted earnings per share excluding after-tax intangible amortization expense and special items, are non-GAAP financial measures and should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Except for guidance measures, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the company’s website at www.investor.jnj.com. Johnson & Johnson does not provide GAAP financial measures on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments without unreasonable effort. These items are uncertain, depend on various factors, and could be material to Johnson & Johnson’s results computed in accordance with GAAP.

Johnson & Johnson will conduct a conference call with investors to discuss this news release today at 8:30 a.m., Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Johnson & Johnson website at www.investor.jnj.com. A replay and podcast will be available approximately two hours after the live webcast by visitingwww.investor.jnj.com.

Copies of the financial schedules accompanying this press release are available at www.investor.jnj.com/historical-sales.cfm. These schedules include supplementary sales data, a condensed consolidated statement of earnings, reconciliations of non-GAAP financial measures, and sales of key products/franchises. Additional information on Johnson & Johnson, including adjusted income before tax by segment, a pharmaceutical pipeline of selected compounds in late stage development and a copy of today’s earnings call presentation can be found on the company’s website at www.investor.jnj.com.

NOTE TO INVESTORS CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position and business strategy. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to, economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; market conditions and the possibility that the on-going share repurchase program may be delayed, suspended or discontinued; the impact of business combinations and divestitures; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws and regulations, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns or financial distress of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and description of these risks, uncertainties and other factors can be found in Johnson & Johnson’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016, including in Exhibit 99 thereto, and the company’s subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.investor.jnj.com, or on request from Johnson & Johnson. Any forward-looking statement made in this release speaks only as of the date of this release. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.

Johnson & Johnson and Subsidiaries
Supplementary Sales Data

(Unaudited; Dollars in Millions)	THIRD QUARTER						NINE MONTHS
			Percent Change						Percent Change
	2016	2015	Total		Operations	Currency	2016	2015	Total		Operations	Currency
Sales to customers by
segment of business

Consumer
U.S.	$ 1,291	1,277	1.1	%	1.1	–	$ 4,033	3,991	1.1	%	1.1	–
International	1,970	2,037	(3.3)		(0.6)	(2.7)	5,842	6,196	(5.7)		0.1	(5.8)
	3,261	3,314	(1.6)		0.1	(1.7)	9,875	10,187	(3.1)		0.4	(3.5)

Pharmaceutical
U.S.	5,042	4,509	11.8		11.8	–	15,123	13,423	12.7		12.7	–
International	3,358	3,185	5.4		5.0	0.4	10,109	9,943	1.7		4.2	(2.5)
	8,400	7,694	9.2		9.0	0.2	25,232	23,366	8.0		9.1	(1.1)

Medical Devices
U.S.	3,048	3,005	1.4		1.4	–	9,118	8,980	1.5		1.5	–
International	3,111	3,089	0.7		(0.2)	0.9	9,559	9,730	(1.8)		0.5	(2.3)
	6,159	6,094	1.1		0.7	0.4	18,677	18,710	(0.2)		1.0	(1.2)

U.S.	9,381	8,791	6.7		6.7	–	28,274	26,394	7.1		7.1	–
International	8,439	8,311	1.5		1.7	(0.2)	25,510	25,869	(1.4)		1.8	(3.2)
Worldwide	$ 17,820	17,102	4.2	%	4.3	(0.1)	$ 53,784	52,263	2.9	%	4.5	(1.6)

Johnson & Johnson and Subsidiaries
Supplementary Sales Data

(Unaudited; Dollars in Millions)	THIRD QUARTER						NINE MONTHS
			Percent Change						Percent Change
	2016	2015	Total		Operations	Currency	2016	2015	Total		Operations	Currency
Sales to customers by
geographic area

U.S.	$ 9,381	8,791	6.7	%	6.7	–	$ 28,274	26,394	7.1	%	7.1	–

Europe	3,832	3,802	0.8		3.2	(2.4)	11,769	11,993	(1.9)		0.5	(2.4)
Western Hemisphere excluding U.S.	1,396	1,463	(4.6)		(1.3)	(3.3)	4,269	4,603	(7.3)		4.4	(11.7)
Asia-Pacific, Africa	3,211	3,046	5.4		1.4	4.0	9,472	9,273	2.1		2.1	0.0
International	8,439	8,311	1.5		1.7	(0.2)	25,510	25,869	(1.4)		1.8	(3.2)

Worldwide	$ 17,820	17,102	4.2	%	4.3	(0.1)	$ 53,784	52,263	2.9	%	4.5	(1.6)

Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)	THIRD QUARTER

	2016			2015			Percent
			Percent			Percent	Increase
	Amount		to Sales	Amount		to Sales	(Decrease)
Sales to customers	$ 17,820		100.0	$ 17,102		100.0	4.2
Cost of products sold	5,486		30.8	5,224		30.5	5.0
Selling, marketing and administrative expenses	4,772		26.8	5,081		29.7	(6.1)
Research and development expense	2,178		12.2	2,154		12.6	1.1
In-process research and development	–		–	10		0.1
Interest (income) expense, net	95		0.5	91		0.5
Other (income) expense, net	(54)		(0.2)	420		2.5
Restructuring	62		0.3	–		–
Earnings before provision for taxes on income	5,281		29.6	4,122		24.1	28.1
Provision for taxes on income	1,009		5.6	764		4.5	32.1
Net earnings	$ 4,272		24.0	$ 3,358		19.6	27.2

Net earnings per share (Diluted)	$ 1.53			$ 1.20			27.5

Average shares outstanding (Diluted)	2,785.4			2,807.2

Effective tax rate	19.1	%		18.5	%

Adjusted earnings before provision for taxes and net earnings ⁽¹⁾
Earnings before provision for taxes on income	$ 5,831		32.7	$ 5,212		30.5	11.9
Net earnings	$ 4,683		26.3	$ 4,172		24.4	12.2
Net earnings per share (Diluted)	$ 1.68			$ 1.49			12.8
Effective tax rate	19.7	%		20.0	%

⁽¹⁾See Reconciliation of Non-GAAP Financial Measures.

Johnson & Johnson and Subsidiaries
Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)	NINE MONTHS

	2016			2015			Percent
			Percent			Percent	Increase
	Amount		to Sales	Amount		to Sales	(Decrease)
Sales to customers	$ 53,784		100.0	$ 52,263		100.0	2.9
Cost of products sold	16,151		30.0	15,863		30.4	1.8
Selling, marketing and administrative expenses	14,636		27.2	15,312		29.3	(4.4)
Research and development expense	6,455		12.0	6,182		11.8	4.4
In-process research and development	29		0.1	10		0.0
Interest (income) expense, net	274		0.5	317		0.6
Other (income) expense, net	464		0.9	(859)		(1.6)
Restructuring	296		0.5	–		–
Earnings before provision for taxes on income	15,479		28.8	15,438		29.5	0.3
Provision for taxes on income	2,753		5.1	3,244		6.2	(15.1)
Net earnings	$ 12,726		23.7	$ 12,194		23.3	4.4

Net earnings per share (Diluted)	$ 4.55			$ 4.33			5.1

Average shares outstanding (Diluted)	2,796.6			2,817.1

Effective tax rate	17.8	%		21.0	%

Adjusted earnings before provision for taxes and net earnings ⁽¹⁾
Earnings before provision for taxes on income	$ 17,656		32.8	$ 17,090		32.7	3.3
Net earnings	$ 14,403		26.8	$ 13,402		25.6	7.5
Net earnings per share (Diluted)	$ 5.15			$ 4.76			8.2
Effective tax rate	18.4	%		21.6	%

⁽¹⁾See Reconciliation of Non-GAAP Financial Measures.

Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measures

	Third Quarter		% Incr. /		Nine Months YTD		% Incr. /
(Dollars in Millions Except Per Share Data)	2016	2015	(Decr.)		2016	2015	(Decr.)

Earnings before provision for taxes on income – as reported	$ 5,281	4,122	28.1	%	$ 15,479	15,438	0.3	%

Intangible asset amortization expense	319	639			927	1,269

Restructuring/Other ⁽¹⁾	109	–			387	–

Litigation expense, net	55	409			721	141

DePuy ASR™ Hip program	–	–			–	148

In-process research and development	–	10			29	10

Other	67	32			113	84

Earnings before provision for taxes on income – as adjusted	$ 5,831	5,212	11.9	%	$ 17,656	17,090	3.3	%

Net Earnings – as reported	$ 4,272	3,358	27.2	%	$ 12,726	12,194	4.4	%

Intangible asset amortization expense	236	437			679	893

Restructuring/Other	76	–			293	–

Litigation expense, net	46	348			595	118

DePuy ASR™ Hip program	–	–			–	130

In-process research and development	–	6			23	6

Other	53	23			87	61

Net Earnings – as adjusted	$ 4,683	4,172	12.2	%	$ 14,403	13,402	7.5	%

Diluted Net Earnings per share – as reported	$ 1.53	1.20	27.5	%	$ 4.55	4.33	5.1	%

Intangible asset amortization expense	0.08	0.16			0.24	0.32

Restructuring/Other	0.03	–			0.11	–

Litigation expense, net	0.02	0.12			0.21	0.04

DePuy ASR™ Hip program	–	–			–	0.05

In-process research and development	–	–			0.01	–

Other	0.02	0.01			0.03	0.02

Diluted Net Earnings per share – as adjusted	$ 1.68	1.49	12.8	%	$ 5.15	4.76	8.2	%

Operational Diluted Net Earnings per share – as adjusted at 2014 foreign currency exchange rates		1.63				5.22

Impact of currency at 2015 foreign currency exchange rates	$ –	(0.14)			$ 0.04	(0.46)

Operational Diluted Net Earnings per share – as adjusted at 2015 foreign currency exchange rates	$ 1.68	1.49	12.8	%	$ 5.19	4.76	9.0	%

⁽¹⁾Includes $3M recorded in cost of products sold and $44M recorded in other (income) expense for the third quarter.
Includes $27M recorded in cost of products sold and $64M recorded in other (income) expense for nine months YTD.

Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measure

Operational Sales Growth Excluding Acquisitions, Divestitures, and Hepatitis C Sales⁽¹⁾
THIRD QUARTER 2016 ACTUAL vs. 2015 ACTUAL

Segments

	Consumer	Pharmaceutical	Medical Devices	Total
	Operational %⁽²⁾
WW As Reported:	0.1%	9.0%	0.7%	4.3%
U.S.	1.1%	11.8%	1.4%	6.7%
International	(0.6)%	5.0%	(0.2)%	1.7%

Wound Care/Other
*SPLENDA^®*	2.1			0.4
U.S.	4.0			0.6
International	1.0			0.2

Cardiovascular
*Cordis*			2.3	0.9
U.S.			1.1	0.4
International			3.7	1.4

Skin Care	(2.3)
*Vogue*	(5.8)			(0.4)
U.S.	0.0			(0.8)
International				0.0

Other Neuroscience
*Controlled Substance Raw Material and API Business*		0.7		0.3
U.S.		0.9		0.4
International		0.4		0.1

All Other Acquisitions and Divestitures	(0.3)	0.0	0.1	0.0
U.S.	(0.8)	0.0	(0.2)	(0.2)
International	(0.1)	0.0	0.4	0.2

WW Ops excluding Acquisitions and Divestitures	(0.4)%	9.7%	3.1%	5.5%
U.S.	(1.5)%	12.7%	2.3%	7.1%
International	0.3%	5.4%	3.9%	3.6%

Hepatitis C		1.0		0.4
U.S.		0.3		0.2
International		1.6		0.6

WW Ops excluding Hepatitis C only		10.0%		4.7%
U.S.		12.1%		6.9%
International		6.6%		2.3%

WW Ops excluding Acquisitions, Divestitures and Hepatitis C	(0.4)%	10.7%	3.1%	5.9%
U.S.	(1.5)%	13.0%	2.3%	7.3%
International	0.3%	7.0%	3.9%	4.2%

⁽¹⁾Hepatitis C products include OLYSIO^®/SOVRIAD^®and INCIVO^®
⁽²⁾Operational growth excludes the effect of translational currency

Johnson & Johnson and Subsidiaries
Reconciliation of Non-GAAP Financial Measure

Operational Sales Growth Excluding Acquisitions, Divestitures, and Hepatitis C Sales⁽¹⁾
NINE MONTHS 2016 ACTUAL vs. 2015 ACTUAL

Segments

	Consumer	Pharmaceutical	Medical Devices	Total
	Operational %⁽²⁾
WW As Reported:	0.4%	9.1%	1.0%	4.5%
U.S.	1.1%	12.7%	1.5%	7.1%
International	0.1%	4.2%	0.5%	1.8%

Wound Care/Other
*SPLENDA^®*	2.2			0.4
U.S.	4.3			0.7
International	0.9			0.2

Cardiovascular
*Cordis*			2.4	0.9
U.S.			1.1	0.4
International			3.5	1.3

Skin Care	(0.7)
*Vogue*	(1.9)			(0.1)
U.S.	0.0			(0.3)
International				0.0

All Other Acquisitions and Divestitures	(0.1)	0.4	0.0	0.1
U.S.	(0.3)	0.7	(0.1)	0.2
International	0.0	0.0	0.1	0.1

WW Ops excluding Acquisitions and Divestitures	1.8%	9.5%	3.4%	5.8%
U.S.	3.2%	13.4%	2.5%	8.1%
International	1.0%	4.2%	4.1%	3.4%

Hepatitis C		2.4		1.1
U.S.		1.1		0.6
International		4.2		1.6

WW Ops excluding Hepatitis C only		11.5%		5.6%
U.S.		13.8%		7.7%
International		8.4%		3.4%

WW Ops excluding Acquisitions, Divestitures, and Hepatitis C	1.8%	11.9%	3.4%	6.9%
U.S.	3.2%	14.5%	2.5%	8.7%
International	1.0%	8.4%	4.1%	5.0%

⁽¹⁾Hepatitis C products include OLYSIO^®/SOVRIAD^®and INCIVO^®
⁽²⁾Operational growth excludes the effect of translational currency

	REPORTED SALES vs. PRIOR PERIOD ($MM)
	THIRD QUARTER						NINE MONTHS
				% Change						% Change
		2016	2015	Reported	Operational⁽¹⁾	Currency		2016	2015	Reported	Operational⁽¹⁾	Currency
CONSUMER SEGMENT ⁽²⁾
BABY CARE
US		$ 96	103	-6.8%	-6.8%	–		$ 293	$ 318	-7.9%	-7.9%	–
Intl		370	403	-8.2%	-5.3%	-2.9%		1,124	1,242	-9.5%	-2.5%	-7.0%
WW		466	506	-7.9%	-5.6%	-2.3%		1,417	1,560	-9.2%	-3.6%	-5.6%
ORAL CARE
US		156	154	1.3%	1.3%	–		485	459	5.7%	5.7%	–
Intl		227	224	1.3%	3.1%	-1.8%		686	713	-3.8%	1.8%	-5.6%
WW		383	378	1.3%	2.3%	-1.0%		1,171	1,172	-0.1%	3.3%	-3.4%
OTC
US		380	383	-0.8%	-0.8%	–		1,230	1,154	6.6%	6.6%	–
Intl		584	580	0.7%	3.5%	-2.8%		1,761	1,776	-0.8%	4.2%	-5.0%
WW		964	963	0.1%	1.8%	-1.7%		2,991	2,930	2.1%	5.1%	-3.0%
SKIN CARE
US		517	435	18.9%	18.9%	–		1,560	1,418	10.0%	10.0%	–
Intl		438	428	2.3%	5.3%	-3.0%		1,210	1,242	-2.6%	2.7%	-5.3%
WW		955	863	10.7%	12.2%	-1.5%		2,770	2,660	4.1%	6.6%	-2.5%
WOMEN’S HEALTH
US		3	6	-50.0%	-50.0%	–		16	19	-15.8%	-15.8%	–
Intl		266	304	-12.5%	-9.1%	-3.4%		787	898	-12.4%	-5.1%	-7.3%
WW		269	310	-13.2%	-9.9%	-3.3%		803	917	-12.4%	-5.3%	-7.1%
WOUND CARE / OTHER
US		139	196	-29.1%	-29.1%	–		449	623	-27.9%	-27.9%	–
Intl		85	98	-13.3%	-13.2%	-0.1%		274	325	-15.7%	-12.0%	-3.7%
WW		224	294	-23.8%	-23.8%	0.0%		723	948	-23.7%	-22.4%	-1.3%

TOTAL CONSUMER
US		1,291	1,277	1.1%	1.1%	–		4,033	3,991	1.1%	1.1%	–
Intl		1,970	2,037	-3.3%	-0.6%	-2.7%		5,842	6,196	-5.7%	0.1%	-5.8%
WW		$ 3,261	3,314	-1.6%	0.1%	-1.7%		$ 9,875	10,187	-3.1%	0.4%	-3.5%



	REPORTED SALES vs. PRIOR PERIOD ($MM)
	THIRD QUARTER						NINE MONTHS
				% Change						% Change
		2016	2015	Reported	Operational⁽¹⁾	Currency		2016	2015	Reported	Operational⁽¹⁾	Currency
PHARMACEUTICAL SEGMENT ⁽²⁾
IMMUNOLOGY
US		$ 2,294	1,910	20.1%	20.1%	–		$ 6,689	5,541	20.7%	20.7%	–
Intl		790	704	12.2%	11.6%	0.6%		2,343	2,090	12.1%	15.7%	-3.6%
WW		3,084	2,614	18.0%	17.8%	0.2%		9,032	7,631	18.4%	19.4%	-1.0%
REMICADE
US		1,222	1,117	9.4%	9.4%	–		3,669	3,260	12.5%	12.5%	–
US Exports ⁽³⁾		255	180	41.7%	41.7%	–		673	602	11.8%	11.8%	–
Intl		306	316	-3.2%	-2.9%	-0.3%		1,000	1,019	-1.9%	3.4%	-5.3%
WW		1,783	1,613	10.5%	10.6%	-0.1%		5,342	4,881	9.4%	10.5%	-1.1%
SIMPONI / SIMPONI ARIA
US		256	199	28.6%	28.6%	–		716	526	36.1%	36.1%	–
Intl		225	181	24.3%	20.6%	3.7%		603	462	30.5%	31.3%	-0.8%
WW		481	380	26.6%	24.8%	1.8%		1,319	988	33.5%	33.9%	-0.4%
STELARA
US		561	414	35.5%	35.5%	–		1,631	1,153	41.5%	41.5%	–
Intl		253	199	27.1%	27.8%	-0.7%		722	579	24.7%	27.2%	-2.5%
WW		814	613	32.8%	33.0%	-0.2%		2,353	1,732	35.9%	36.7%	-0.8%
OTHER IMMUNOLOGY
US		–	–	–	–	–		–	–	–	–	–
Intl		6	8	-25.0%	-22.6%	-2.4%		18	30	-40.0%	-32.9%	-7.1%
WW		6	8	-25.0%	-22.6%	-2.4%		18	30	-40.0%	-32.9%	-7.1%
INFECTIOUS DISEASES
US		387	379	2.1%	2.1%	–		1,107	1,172	-5.5%	-5.5%	–
Intl		455	469	-3.0%	-2.2%	-0.8%		1,340	1,683	-20.4%	-18.5%	-1.9%
WW		842	848	-0.7%	-0.3%	-0.4%		2,447	2,855	-14.3%	-13.2%	-1.1%
EDURANT
US		13	11	18.2%	18.2%	–		38	29	31.0%	31.0%	–
Intl		136	100	36.0%	35.4%	0.6%		370	274	35.0%	35.2%	-0.2%
WW		149	111	34.2%	33.7%	0.5%		408	303	34.7%	34.9%	-0.2%
OLYSIO / SOVRIAD
US		13	26	-50.0%	-50.0%	–		50	174	-71.3%	-71.3%	–
Intl		8	53	-84.9%	-85.7%	0.8%		46	403	-88.6%	-88.2%	-0.4%
WW		21	79	-73.4%	-73.9%	0.5%		96	577	-83.4%	-83.1%	-0.3%
PREZISTA / PREZCOBIX / REZOLSTA
US		310	285	8.8%	8.8%	–		860	777	10.7%	10.7%	–
Intl		183	183	0.0%	2.0%	-2.0%		544	566	-3.9%	-1.1%	-2.8%
WW		493	468	5.3%	6.1%	-0.8%		1,404	1,343	4.5%	5.7%	-1.2%
OTHER INFECTIOUS DISEASES
US		51	57	-10.5%	-10.5%	–		159	192	-17.2%	-17.2%	–
Intl		128	133	-3.8%	-3.0%	-0.8%		380	440	-13.6%	-10.6%	-3.0%
WW		179	190	-5.8%	-5.2%	-0.6%		539	632	-14.7%	-12.6%	-2.1%

See footnotes at end of schedule

		REPORTED SALES vs. PRIOR PERIOD ($MM)
	THIRD QUARTER						NINE MONTHS
				% Change						% Change
		2016	2015	Reported	Operational⁽¹⁾	Currency		2016	2015	Reported	Operational⁽¹⁾	Currency
NEUROSCIENCE
US		622	655	-5.0%	-5.0%	–		1,997	2,098	-4.8%	-4.8%	–
Intl		842	821	2.6%	0.0%	2.6%		2,618	2,560	2.3%	3.5%	-1.2%
WW		1,464	1,476	-0.8%	-2.2%	1.4%		4,615	4,658	-0.9%	-0.2%	-0.7%
CONCERTA / METHYLPHENIDATE
US		102	89	14.6%	14.6%	–		365	317	15.1%	15.1%	–
Intl		88	89	-1.1%	-2.5%	1.4%		294	291	1.0%	4.4%	-3.4%
WW		190	178	6.7%	6.0%	0.7%		659	608	8.4%	10.0%	-1.6%
INVEGA
US		28	82	-65.9%	-65.9%	–		70	281	-75.1%	-75.1%	–
Intl		59	57	3.5%	-1.0%	4.5%		185	179	3.4%	2.7%	0.7%
WW		87	139	-37.4%	-39.2%	1.8%		255	460	-44.6%	-44.9%	0.3%
INVEGA SUSTENNA / XEPLION / INVEGA TRINZA
US		339	277	22.4%	22.4%	–		983	758	29.7%	29.7%	–
Intl		217	182	19.2%	18.8%	0.4%		646	548	17.9%	19.8%	-1.9%
WW		556	459	21.1%	20.9%	0.2%		1,629	1,306	24.7%	25.5%	-0.8%
RISPERDAL CONSTA
US		94	103	-8.7%	-8.7%	–		289	306	-5.6%	-5.6%	–
Intl		128	132	-3.0%	-3.9%	0.9%		394	430	-8.4%	-7.1%	-1.3%
WW		222	235	-5.5%	-6.0%	0.5%		683	736	-7.2%	-6.4%	-0.8%
OTHER NEUROSCIENCE
US		59	104	-43.3%	-43.3%	–		290	436	-33.5%	-33.5%	–
Intl		350	361	-3.0%	-7.3%	4.3%		1,099	1,112	-1.2%	-0.6%	-0.6%
WW		409	465	-12.0%	-15.3%	3.3%		1,389	1,548	-10.3%	-9.9%	-0.4%
ONCOLOGY
US		622	394	57.9%	57.9%	–		1,740	1,090	59.6%	59.6%	–
Intl		895	776	15.3%	15.4%	-0.1%		2,605	2,332	11.7%	14.1%	-2.4%
WW		1,517	1,170	29.7%	29.7%	0.0%		4,345	3,422	27.0%	28.7%	-1.7%
IMBRUVICA
US		179	98	82.7%	82.7%	–		455	253	79.8%	79.8%	–
Intl		170	86	97.7%	*	**		450	201	*	*	**
WW		349	184	89.7%	92.1%	-2.4%		905	454	99.3%	*	**
VELCADE
US		–	–	–	–	–		–	–	–	–	–
Intl		304	329	-7.6%	-7.4%	-0.2%		950	1,012	-6.1%	-3.7%	-2.4%
WW		304	329	-7.6%	-7.4%	-0.2%		950	1,012	-6.1%	-3.7%	-2.4%
ZYTIGA
US		282	276	2.2%	2.2%	–		840	784	7.1%	7.1%	–
Intl		300	272	10.3%	8.5%	1.8%		901	866	4.0%	5.4%	-1.4%
WW		582	548	6.2%	5.3%	0.9%		1,741	1,650	5.5%	6.3%	-0.8%
OTHER ONCOLOGY
US		161	20	*	*	–		445	53	*	*	–
Intl		121	89	36.0%	36.6%	-0.6%		304	253	20.2%	23.0%	-2.8%
WW		282	109	*	*	**		749	306	*	*	**
CARDIOVASCULAR / METABOLISM / OTHER
US		1,117	1,171	-4.6%	-4.6%	–		3,590	3,522	1.9%	1.9%	–
Intl		376	415	-9.4%	-7.4%	-2.0%		1,203	1,278	-5.9%	-1.5%	-4.4%
WW		1,493	1,586	-5.9%	-5.4%	-0.5%		4,793	4,800	-0.1%	1.1%	-1.2%
XARELTO
US		529	461	14.8%	14.8%	–		1,690	1,374	23.0%	23.0%	–
Intl		–	–	–	–	–		–	–	–	–	–
WW		529	461	14.8%	14.8%	–		1,690	1,374	23.0%	23.0%	–
INVOKANA / INVOKAMET
US		294	322	-8.7%	-8.7%	–		939	890	5.5%	5.5%	–
Intl		34	18	88.9%	94.3%	-5.4%		97	46	*	*	**
WW		328	340	-3.5%	-3.2%	-0.3%		1,036	936	10.7%	11.3%	-0.6%
PROCRIT / EPREX
US		168	177	-5.1%	-5.1%	–		581	519	11.9%	11.9%	–
Intl		82	86	-4.7%	-4.7%	0.0%		265	289	-8.3%	-5.5%	-2.8%
WW		250	263	-4.9%	-4.9%	0.0%		846	808	4.7%	5.7%	-1.0%
OTHER
US		126	211	-40.3%	-40.3%	–		380	739	-48.6%	-48.6%	–
Intl		260	311	-16.4%	-14.1%	-2.3%		841	943	-10.8%	-6.3%	-4.5%
WW		386	522	-26.1%	-24.7%	-1.4%		1,221	1,682	-27.4%	-24.9%	-2.5%

TOTAL PHARMACEUTICAL
US		5,042	4,509	11.8%	11.8%	–		15,123	13,423	12.7%	12.7%	–
Intl		3,358	3,185	5.4%	5.0%	0.4%		10,109	9,943	1.7%	4.2%	-2.5%
WW		$ 8,400	7,694	9.2%	9.0%	0.2%		$ 25,232	23,366	8.0%	9.1%	-1.1%


See footnotes at end of schedule

	REPORTED SALES vs. PRIOR PERIOD ($MM)
	THIRD QUARTER						NINE MONTHS
				% Change						% Change
		2016	2015	Reported	Operational⁽¹⁾	Currency		2016	2015	Reported	Operational⁽¹⁾	Currency
MEDICAL DEVICES SEGMENT ^{(2) (4)}
CARDIOVASCULAR
US		$ 235	239	-1.7%	-1.7%	–		$ 701	702	-0.1%	-0.1%	–
Intl		216	285	-24.2%	-26.8%	2.6%		663	895	-25.9%	-25.6%	-0.3%
WW		451	524	-13.9%	-15.3%	1.4%		1,364	1,597	-14.6%	-14.4%	-0.2%
DIABETES CARE
US		191	205	-6.8%	-6.8%	–		548	631	-13.2%	-13.2%	–
Intl		236	265	-10.9%	-11.2%	0.3%		779	817	-4.7%	-2.2%	-2.5%
WW		427	470	-9.1%	-9.2%	0.1%		1,327	1,448	-8.4%	-7.0%	-1.4%
DIAGNOSTICS
US		–	–	–	–	–		–	–	–	–	–
Intl		7	16	-56.3%	-55.8%	-0.5%		66	62	6.5%	21.1%	-14.6%
WW		7	16	-56.3%	-55.8%	-0.5%		66	62	6.5%	21.1%	-14.6%
ORTHOPAEDICS
US		1,343	1,312	2.4%	2.4%	–		4,099	3,942	4.0%	4.0%	–
Intl		908	869	4.5%	4.5%	0.0%		2,848	2,897	-1.7%	0.9%	-2.6%
WW		2,251	2,181	3.2%	3.2%	0.0%		6,947	6,839	1.6%	2.7%	-1.1%
HIPS
US		190	185	2.7%	2.7%	–		590	568	3.9%	3.9%	–
Intl		130	124	4.8%	6.4%	-1.6%		421	410	2.7%	6.5%	-3.8%
WW		320	309	3.6%	4.2%	-0.6%		1,011	978	3.4%	5.0%	-1.6%
KNEES
US		223	214	4.2%	4.2%	–		696	662	5.1%	5.1%	–
Intl		132	129	2.3%	4.0%	-1.7%		433	429	0.9%	4.3%	-3.4%
WW		355	343	3.5%	4.1%	-0.6%		1,129	1,091	3.5%	4.8%	-1.3%
TRAUMA
US		389	368	5.7%	5.7%	–		1,151	1,083	6.3%	6.3%	–
Intl		248	239	3.8%	3.1%	0.7%		764	801	-4.6%	-2.1%	-2.5%
WW		637	607	4.9%	4.6%	0.3%		1,915	1,884	1.6%	2.7%	-1.1%
SPINE & OTHER
US		541	545	-0.7%	-0.7%	–		1,662	1,629	2.0%	2.0%	–
Intl		398	377	5.6%	5.0%	0.6%		1,230	1,257	-2.1%	0.0%	-2.1%
WW		939	922	1.8%	1.6%	0.2%		2,892	2,886	0.2%	1.1%	-0.9%
SURGERY
US		1,002	987	1.5%	1.5%	–		3,003	2,947	1.9%	1.9%	–
Intl		1,282	1,233	4.0%	3.9%	0.1%		3,906	3,857	1.3%	4.3%	-3.0%
WW		2,284	2,220	2.9%	2.9%	0.0%		6,909	6,804	1.5%	3.2%	-1.7%
ADVANCED
US		390	357	9.2%	9.2%	–		1,131	1,046	8.1%	8.1%	–
Intl		494	438	12.8%	13.0%	-0.2%		1,478	1,359	8.8%	11.9%	-3.1%
WW		884	795	11.2%	11.3%	-0.1%		2,609	2,405	8.5%	10.3%	-1.8%
GENERAL
US		414	427	-3.0%	-3.0%	–		1,254	1,272	-1.4%	-1.4%	–
Intl		649	656	-1.1%	-1.1%	0.0%		2,006	2,063	-2.8%	0.0%	-2.8%
WW		1,063	1,083	-1.8%	-1.8%	0.0%		3,260	3,335	-2.2%	-0.5%	-1.7%
SPECIALTY
US		198	203	-2.5%	-2.5%	–		618	629	-1.7%	-1.7%	–
Intl		139	139	0.0%	-1.2%	1.2%		422	435	-3.0%	0.3%	-3.3%
WW		337	342	-1.5%	-2.0%	0.5%		1,040	1,064	-2.3%	-1.0%	-1.3%
VISION CARE
US		277	262	5.7%	5.7%	–		767	758	1.2%	1.2%	–
Intl		462	421	9.7%	5.3%	4.4%		1,297	1,202	7.9%	7.7%	0.2%
WW		739	683	8.2%	5.5%	2.7%		2,064	1,960	5.3%	5.2%	0.1%

TOTAL MEDICAL DEVICES
US		3,048	3,005	1.4%	1.4%	–		9,118	8,980	1.5%	1.5%	–
Intl		3,111	3,089	0.7%	-0.2%	0.9%		9,559	9,730	-1.8%	0.5%	-2.3%
WW		$ 6,159	6,094	1.1%	0.7%	0.4%		$ 18,677	18,710	-0.2%	1.0%	-1.2%







* Percentage greater than 100%
** Not meaningful
(1) Operational growth excludes the effect of translational currency
(2) Unaudited
(3) Reported as U.S. sales
(4) Prior year amounts have been reclassified to conform to current year product disclosure

Branding

Craigslist founder donates $15 million for journalism ethics

Published

5 years ago

February 6, 2019

Willie David

PASADENA, Calif. (AP) — The founder of Craigslist says he will donate $15 million to Columbia University and the Poynter Institute for separate efforts promoting ethics in journalism.

The announcement on Wednesday establishes Craig Newmark in the forefront of philanthropists focused on journalism, a cause he’s supported with some $85 million in the past few years. Some in the industry see irony in that, since the online classified advertising site that made him rich took away a lucrative revenue source for many newspapers.

Columbia, with one of the leading graduate journalism programs in the country, will get $10 million to establish the Craig Newmark Center for Journalism Ethics and Security. The Florida-based Poynter think tank will get $5 million, its largest single donation ever, to offer additional journalism ethics training.

Newmark said he’s been concerned since the 2016 election about attacks on the press and the trust of citizens in the institution. Among his other gifts has been $20 million to establish a graduate school for journalism at the City University of New York.

“A trustworthy press is the immune system of democracy,” Newmark said.

Technology has made ethical issues much more complex than they used to be, said Steve Coll, dean of the Columbia Graduate School of Journalism. The ability to manipulate video, the need to protect sources in a high-tech world and provide security for journalists against online harassment are all issues that will be ripe for study in the new center Columbia will set up, he said.

Columbia will soon begin searching for a professor to direct the effort, he said.

Newmark, Coll said, “has decided to use his wealth very deliberately and we’re all appreciative of that.”

Kelly McBride, senior vice president at Poynter who has been the go-to expert for many in the journalism community who have questions about the ethical aspects of doing their job, said there’s been an increase in requests for help from newsrooms and individuals over the past two years.

“I feel like the industry is calling out for some sort of reinforcement,” she said, “and I really hope that we can be that resource in a much larger way than we do right now.”

The naming gift will create a new center for ethics and leadership at Poynter, where Newmark is a member of the board of directors.

Newmark said guilt about Craigslist’s impact on journalism doesn’t motivate him. While he said Craigslist had some effect on newspaper revenues, several other factors contributed to the financial troubles of journalism, and a focus on the company he created “is entirely misplaced.”

If Craigslist hadn’t created the online classified business, “it would have been someone else,” Coll said.

“Craig has really stepped up,” he said.

Branding

World waits to see if Trump-Xi dinner brings trade peace

Published

5 years ago

December 1, 2018

Willie David

BUENOS AIRES, Argentina (AP) — When President Donald Trump sits down for dinner Saturday with Chinese leader Xi Jinping, their table talk will undoubtedly have a global impact. What they agree on — or don’t — will determine whether stock markets rise or fall, whether the world economy gets some relief from destabilizing trade tensions, and cast judgment on the wisdom of the American leader’s hard-nosed trade tactics.

Trump and Xi will be seeking a way out of a trade war between the world’s two biggest economies, while also saving face for their domestic audiences at home. Trump Friday expressed optimism about a deal. “There’s some good signs,” he said. “We’ll see what happens.”

The Trump-Xi meeting is set to be the marquee event of Trump’s whirlwind two-day trip to Argentina for the Group of 20 Summit after the president cancelled a sit-down with Russian President Vladimir Putin over mounting tensions between Russia and Ukraine.

Trade analysts and administration officials acknowledge it won’t be easy. The United States and China are locked in a dispute over their trade imbalance and Beijing’s push to challenge American technological dominance. Washington accuses China of deploying predatory tactics in its tech drive, including stealing trade secrets and forcing American firms to hand over technology in exchange for access to the Chinese market.

Trump has imposed import taxes on $250 billion in Chinese products. If he can’t get a deal with Xi, he’s poised to more than double most of those tariffs Jan. 1. And he’s threatened to expand tariffs to virtually everything China ships to the United States.

China, which has already slapped tariffs on $110 billion in U.S. goods, is likely to retaliate, ramping up a conflict that is already rattling financial markets and causing forecasters to downgrade the outlook for global economic growth.

U.S. officials insist that the American economy is more resilient to the tumult than China’s, but they remain anxious of the economic effects of a prolonged showdown — as Trump has made economic growth the benchmark by which he wants his administration judges.

It’s unlikely the two countries will reach a full-blown resolution in Buenos Aires; the issues that divide them are just too difficult. What’s more likely, analysts say, is that they reach a truce, buying time for more substantive talks. Whether such a cease-fire would be enough to get Trump to delay higher or expanded tariffs is unclear.

Growing concerns that the trade war will increasingly hurt corporate earnings and the U.S. economy are a key reason why U.S. stock prices have been sinking this fall.

Joining other forecasters, economists at the Organization for Economic Co-operation and Development last week downgraded their outlook for global economic growth next year to 3.5 percent from a previous 3.7 percent. In doing so, they cited the trade conflict as well as political uncertainty.

Trump met Friday with Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi in a rare trilateral meeting. The symbolism ahead of the Xi meeting was clear: the Trump administration has looked to find common cause with both nations in countering China’s regional hegemony.

Earlier that day, Trump signed a revamped three-way trade deal with Canada and Mexico, fulfilling a longstanding pledge, though the agreement could face headwinds in Congress. He also held a series of formal and informal meetings and will continue those sit-downs Saturday, including with German Chancellor Angela Merkel.

Last spring, it looked like Beijing and Washington might have found a peaceful resolution.

In May, Treasury Secretary Steven Mnuchin declared the trade war “on hold” after Beijing agreed to increase its purchases of U.S. soybeans and liquefied natural gas — a move that could have put a dent in China’s massive trade surplus with the United States.

But the cease-fire didn’t last. Facing criticism that he’d gone soft on China, Trump backed away from Mnuchin’s deal and decided to proceed with tariffs.

Now a lasting peace is likely to require the Chinese to scale back their ambitions to become a technological power. Or at least curb the strong-arm tactics.

Kudlow said the administration has been “extremely disappointed” by China’s engagement in trade talks but the meeting between Trump and Xi on the sidelines of the Group of 20 summit could be a game-changer.

“Perhaps we can break through in Buenos Aires or not,” he said.

Kudlow added that if the U.S. doesn’t get “satisfactory” responses to its trade positions more tariffs will be imposed. He said Trump is “not going away.”

“I hope they understand that,” he said.

Republican Sen. Pat Toomey of Pennsylvania is skeptical: “This has been their business model for a while,” Toomey told reporters this week. “They’re not going to abandon it lightly.”

Branding

Microsoft surpasses Apple as most valuable public company

Published

5 years ago

December 1, 2018

Willie David

Microsoft’s big bet on cloud computing is paying off as the company has surpassed Apple as the world’s most valuable publicly traded company.

The software maker’s prospects looked bleak just a few years ago, as licenses for the company’s Windows system fell with a sharp drop in sales of personal computers.

But under CEO Satya Nadella, Microsoft has found stability by focusing on software and services over the internet, or the cloud, with long-term business contracts.

That 1990s personal-computing powerhouse is now having a renaissance moment, as it eclipses Facebook, Google, Amazon and the other tech darlings of the late decade.

Apple had been the world’s most prosperous firm since claiming the top spot from Exxon Mobil earlier this decade. Microsoft surpassed Apple briefly a few times this week, but didn’t close on top until Friday, with a market value of $851 billion to Apple’s $847 billion. Microsoft hadn’t been at the top since the height of the dot-com boom in 2000.

Microsoft became a contender again in large part because Apple’s stock fell nearly 20 percent in November, while Microsoft hasn’t done any worse than the rest of the stock market. But the fact that it hasn’t done poorly is a reflection of its steady focus on business customers in recent years.

Microsoft lost its luster as people were shunning PCs in favor of smartphones. In 2013, PC sales plunged 10 percent to about 315 million, the worst year-to-year drop ever, according to research firms Gartner and IDC. It didn’t help that Microsoft’s effort to make PCs more like phones, Windows 8, was widely panned.

But a turnaround began when the Redmond, Washington, company promoted Nadella as CEO in 2014. He succeeded Microsoft’s longtime CEO, Steve Ballmer, who initially scoffed at the notion that people would be willing to pay $500 or more for Apple’s iPhones.

That bet paid off. Windows is now a dwindling fraction of Microsoft’s business. While the company still runs consumer-focused businesses such as Bing search and Xbox gaming, it has prioritized business-oriented services such as its Office line of email and other workplace software, as well as newer additions such as LinkedIn and Skype. But its biggest growth has happened in the cloud, particularly the cloud platform it calls Azure. Cloud computing now accounts for more than a quarter of Microsoft’s revenue, and Microsoft rivals Amazon as a leading provider of such services.

Wedbush analyst Dan Ives said Azure is still in its early days, meaning there’s plenty of room for growth, especially considering the company’s large customer base for Office and other products.

“While the tech carnage seen over the last month has been brutal, shares of (Microsoft) continue to hold up like the Rock of Gibraltar,” he said.

Being less reliant on consumer demand helped shield Microsoft from holiday season turbulence and U.S.-China trade war jitters affecting Apple and other tech companies.

President Donald Trump amplified those tariff concerns when he told The Wall Street Journal in a story published late Monday that new tariffs could affect iPhones and laptops imported from China.

The iPhone maker had already seen its stock fall after reporting a mixed bag of quarterly results in early November amid fears about how the technology industry will fare in the face of such threats as rising interest rates, increased government regulation and Trump’s escalating trade war with China.

Apple also spooked investors with an unexpected decision to stop disclosing how many iPhones it sells each quarter. That move has been widely interpreted as a sign that Apple foresees further declines in iPhone sales and is trying to mask that.

While smartphones caused the downturn in personal computers years ago, sales of smartphones themselves have now stalled. That’s partly because with fewer innovations from previous models, more people choose to hold on to the devices for longer periods before upgrading.

Daniel Morgan, senior portfolio manager for Synovus Trust, said Microsoft is outperforming its tech rivals in part because of what it’s not. It doesn’t face as much regulatory scrutiny as advertising-hungry Google and Facebook, which have attracted controversy over their data-harvesting practices. Unlike Netflix, it’s not on a hunt for a diminishing number of international subscribers. And while Amazon also has a strong cloud business, it’s still more dependent on online retail.