  johnson and johnson revealed lower earnings and sales numbers than expected in q4 2022   even before q4 numbers were released jnj started falling after a slew of new stories hit the press   even though 2022 was a turbulent year for this household name johnson and johnson’s financials are still solid johnson and johnson’s stock has taken a tumble this month share prices are down from their peak of 18025 on january 6 2023 they hit a onemonth low of 16831 on january 24 2023 and closed at 16869 on january 26 2023 there are multiple reasons for this slip from reduced demand for the jj vaccine to a disappointing reveal of recent earnings numbers for q4 2022 it’s a lot of news at once but for a behemoth company like johnson and johnson putting things in perspective can help since the pandemic began the stock has grown overall for example the highest trading price in february 2020 was 15189 which is well below the 16869 we saw on january 26 2023 johnson and johnson’s q4 2022 numbers weren’t released until january 24 2023 but the stock started falling on january 9 2023 there were many news stories that precipitated the release of the new earnings report first the company announced it would be slowing the production of its covid19 vaccine sales of the vaccine were negatively impacted in 2022 so this news isn’t overly surprising even if it contributed to a decrease in the stock’s value around this time news also broke that one of johnson and johnson’s vaccine manufacturers emergent biosolutions might be suing for breach of contract emergent is saying that it’s owed 420 million from johnson and johnson even in light of critical manufacturing errors emergent made in 2020 more potentially negative news came out this month that fate therapeutics a company that uses immunotherapy to treat cancer would be discontinuing its relationship with johnson and johnson cutting off a potential 3 billion in future revenue finally share prices dropped on january 9 2023 in part because of a company announcement that it was seeking new merger opportunities across the fields of orthopedics cardiovascular eye care and surgical robotics net earnings for q4 2022 were 35 billion with yearoveryear earnings falling 9 sales in q4 2022 were 237 billion a 44 decrease year over year at the same time consolidated sales for the entirety of 2022 were 949 billion which was actually up 13 compared to 2021 while it was a rocky year for the pharmaceutical company and a particularly rocky quarter the megacorporation has strategized ways to keep the economic impact limited there are a few different factors contributing to johnson and johnson’s numbers here are the impacting factors that caused the lower numbers in early 2021 the jj covid vaccine was in high demand compared to other vaccines it was more convenient with just a single dose though its popularity did start to fade towards the end of the year in may 2022 the fda limited who could get this version of coronavirus protection time had revealed that while rare it did carry a higher risk of blood clotting than its pfizer and moderna counterparts although the risks of contracting covid without a vaccine have a higher likelihood of negative outcomes there were better preventative options available for most people now the jj vaccine is reserved only for those who cannot take the pfizer or moderna vaccines limiting the market the impact of limited vaccine sales is the primary thing bringing johnson and johnson’s earning numbers down revenue from this product dropped more than 57 and most of the sales that were made in 2022 came from foreign markets sales across other products were only down 1 in 2020 and 2021 albeit to a lesser degree in 2021 johnson and johnson benefitted from some unique onetime tax benefits these benefits did not repeat in 2022 so the company had a higher tax burden these changes plus increased income for the year pushed the company’s effective tax rate from 104 in 2021 to 162 in 2022 strength of the us dollar while johnson and johnson does a lot of business in the us it does a substantial amount of business across the globe as well inflation wasn’t great in 2021 but it got dramatically worse throughout the first half of 2022 inflation matters because it pushes up the value of the us dollar that’s problematic if you do business in foreign currencies because you either have to increase prices in foreign markets or lose profits when converting those foreign currencies into us dollars if inflation continues its current downward trajectory that could alleviate some of these issues for johnson and johnson that remains yet to be seen though as geopolitical conflict and further impacts of the pandemic could continue to prop up american currency while further devaluing that of other countries upcoming spinoff and what it means for investors later this year likely in november johnson and johnson will be spinning off its consumer products unit brands like tylenol listerine bandaid and neutrogena will go under a new business called kenvue kvue those who hold shares of jnj when the new business officially launches will receive shares of kvue to compensate for the loss of these brands currently represented in their jnj shares if you want to invest in big companies that are better resourced during turbulent times you can check out qai’s large cap kit which takes a longshort position if youre stressing about inflation impacting your investments in companies like jj you can also look at qais inflation kits these include more conservative investments that are better insulated against inflation like certain treasuries and commodities johnson and johnson is an international intergenerational megalith of a company even though its hit some choppy waters over the past year if there’s any company that can sustain a bit of turbulence it’s johnson and johnson