Johnson & Johnson stock research
FY2023 Q3
Johnson & Johnson (JNJ) Gross Margin — Quarter Ended Oct 1, 2023
Revenue decreased slightly from the prior quarter but increased substantially from the same quarter last year. Gross profit and gross margin both declined compared to both periods, with cost of revenue rising relative to revenue.
Gross margin takeaway
Quarter ended Oct 1, 2023 · FY2023 Q3
Revenue decreased slightly from the prior quarter but increased substantially from the same quarter last year. Gross profit and gross margin both declined compared to both periods, with cost of revenue rising relative to revenue.
- The primary observable driver of the gross margin change is the relationship between cost of revenue and revenue. Cost of revenue increased from both the prior quarter and the year-ago quarter, while revenue decreased from the prior quarter and increased from the year-ago quarter, resulting in a lower gross margin. The filing context discusses liquidity and cash flows but does not provide specific commentary on gross margin movements.
- Compared to the immediately preceding quarter, gross margin weakened as revenue edged lower and cost of revenue edged higher. Compared to the same quarter one year earlier, gross margin weakened significantly as revenue grew but cost of revenue grew more.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
69.1%
Gross profit
$14.7B
Revenue
$21.4B
Cost of revenue
$6.6B
Quarter-over-quarter change
-0.9 pts
Year-over-year change
-7.2 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Apr 2, 2023 | $20.9B | $14.2B | $6.7B | 68.0% |
| Jul 2, 2023 | $21.5B | $15.1B | $6.5B | 70.0% |
| Oct 1, 2023 | $21.4B | $14.7B | $6.6B | 69.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 2, 2023
-0.9 pts
Year-over-year change
Oct 2, 2022
-7.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary observable driver of the gross margin change is the relationship between cost of revenue and revenue. Cost of revenue increased from both the prior quarter and the year-ago quarter, while revenue decreased from the prior quarter and increased from the year-ago quarter, resulting in a lower gross margin. The filing context discusses liquidity and cash flows but does not provide specific commentary on gross margin movements.
Compared to the immediately preceding quarter, gross margin weakened as revenue edged lower and cost of revenue edged higher. Compared to the same quarter one year earlier, gross margin weakened significantly as revenue grew but cost of revenue grew more.
Monitor the trend in cost of revenue relative to revenue in upcoming quarters.