Vice President of Investor Relations at Johnson & Johnson
Thanks, Joaquin. Starting with Q4 2022 sales results. Worldwide sales were $23.7 billion for the fourth quarter of 2022, a decrease of 4.4% versus the fourth quarter of 2021. Operational sales growth, which excludes the effect of translational currency, increased 0.9%, as currency had a negative impact of 5.3 points. In the U.S., sales increased 2.9%. In regions outside the U.S., our reported sales declined 11.5%. Operational sales outside the U.S. declined 1.1%, with currency negatively impacting our reported OUS results by 10.4 points. Excluding sales from the COVID-19 vaccine, operational sales growth was 4.6% worldwide, 4.7% in the U.S. and 4.4% outside the U.S. As you will find in our supplemental sales schedule, acquisitions and divestitures had an immaterial impact on our results in the quarter.
Turning now to earnings. For the quarter, net earnings were $3.5 billion, and diluted earnings per share was $1.33 versus diluted earnings per share of $1.77 one year ago. Excluding after-tax intangible asset amortization expense and special items for both periods, adjusted net earnings for the quarter were $6.2 billion, and adjusted diluted earnings per share was $2.35, representing increases of 9.5% and 10.3%, respectively, compared to the fourth quarter of 2021. On an operational basis, adjusted diluted earnings per share increased 15.5%. For the full year 2022, consolidated sales were $94.9 billion, an increase of 1.3% compared to the full year of 2021.
Operationally, full year sales grew 6.1%, with currency having a negative impact of 4.8 points. Sales growth in the U.S. was 3%. In regions outside the U.S., our reported year-over-year sales declined 0.6%. Operational sales growth outside the U.S. grew by 9.1%, with currency negatively impacting our reported OUS results by 9.7 points. As you will find in our supplemental sales schedules, acquisition and divestitures as well as sales from our COVID-19 vaccine had an immaterial impact on our results for the full year.
Net earnings for the full year 2022 were $17.9 billion, and diluted earnings per share was $6.73 versus diluted earnings per share of $7.81 a year ago. 2022 adjusted net earnings were $27 billion, and adjusted diluted earnings per share was $10.15, representing increases of 3.2% and 3.6%, respectively, versus full year 2021. On an operational basis, adjusted diluted earnings per share increased by 9.2%. While not part of our prepared remarks for today's call, we have provided additional information and backup for our full year 2022 sales by segment, consolidated statement of earnings and adjusted income before tax by segment, which can be downloaded from our website.
I will now comment on business segment sales performance highlights for the quarter. Unless otherwise stated, percentages quoted represent the operational sales change in comparison to the fourth quarter of 2021 and, therefore, exclude the impact of currency translation. Beginning with Consumer Health.
Worldwide Consumer Health sales of $3.8 billion increased 1%, with an increase of 10.9% in the U.S. and a decline of 5.8% outside the U.S. Excluding translational currency, worldwide operational sales growth increased 6.4%, and outside the U.S., operational sales growth increased 3.2%. Results were primarily driven by strategic price increases, growth in OTC due to a strong cough, cold and flu season and growth in NEUTROGENA as well as strong new product introductions in Asia Pacific and Latin America. NEUTROGENA growth contributed to the second consecutive quarter of 5% operational growth for Skin Health Beauty. Growth across the portfolio was partially offset by continued, although reduced, supply constraints in the U.S., COVID-19 impacts in China, portfolio simplification and the suspension of personal care product sales in Russia.
Moving on to our Pharmaceutical segment. Worldwide Pharmaceutical sales of $13.2 billion decreased 7.4%, with declines of 0.6% in the U.S. and 14.9% outside of the U.S. Excluding translational currency, worldwide operational sales declined 2.5%, and outside the U.S. operational sales declined 4.5%. Excluding the COVID-19 vaccine sales, worldwide operational sales growth increased 3.9%, U.S. operational sales growth increased 2.4%, and outside the U.S. operational sales growth increased 6%. Pharmaceutical growth, excluding the COVID-19 vaccine, was driven by our key brands and continued uptake in our recently launched products, enabling us to continue to deliver above-market adjusted operational sales growth for the 11th consecutive year, including seven assets with double-digit growth. Growth was driven by DARZALEX, ERLEADA, STELARA and TREMFYA and was partially offset by REMICADE and ZYTIGA due to loss of exclusivity, along with a decrease in IMBRUVICA sales.
Within our Oncology business, DARZALEX and ERLEADA continued to drive strong sales growth, with increases of 33.9% and 48.6%, respectively. ZYTIGA sales declined 43.6% worldwide predominantly due to loss of exclusivity in Europe in September. IMBRUVICA sales declined 12.3% worldwide due to competitive pressures and a suppressed CLL market due to COVID-19. Despite competitive pressures, IMBRUVICA maintains its market leadership position worldwide. In our immunology business, STELARA grew 6.2% driven by market growth and share gains in Crohn's disease and ulcerative colitis, with gains of 4 points and 5.4 points in the U.S., respectively, as well as a favorable prior period adjustment, impacting worldwide results by approximately 460 basis points.
Results in the quarter were partially offset by unfavorable patient mix and rebating in the U.S. as well as austerity measures in Europe and shipment timing in Asia Pacific. TREMFYA grew 12.5% driven by share gains in psoriasis and psoriatic arthritis, with gains of 1.4 points and 2.9 points in the U.S., respectively, along with market growth. Q4 growth was partially offset by a net unfavorable prior period adjustment impacting worldwide results by approximately 1,150 basis points, unfavorable patient mix and a challenging prior year comparison. Beginning in Q1 2023, we anticipate that CARVYKTI, currently reported in other oncology, and SPRAVATO, currently reported in other neuroscience, will meet the threshold to be separately disclosed.
I'll now turn your attention to the MedTech segment. Worldwide MedTech sales of $6.8 billion decreased by 1.2%, with growth of 7.1% in the U.S. and a decline of 8.6% outside of the U.S. Excluding translational currency, worldwide operational sales growth increased 4.9%, and outside the U.S. operational sales growth increased 2.9%. Excluding the impact of acquisition and divestitures, worldwide adjusted operational sales growth was 4.4%. Q4 growth was driven by commercial execution, strong new product introduction performance as well as COVID-19 procedure recovery in many parts of the world. Partially offsetting growth in the quarter was the impact of value-based procurement, COVID resurgence in China as well as supply constraints, predominantly in vision.
Strong growth continued in the U.S., with dollar sales sequentially improving each quarter throughout 2022. OUS performance was adversely impacted by dynamics related to COVID-19, especially given our strong position in China. The Interventional Solutions franchise delivered another quarter of worldwide double-digit growth at 15.1% driven primarily by strong new product introductions, performance, commercial execution and continued market growth in electrophysiology. Abiomed sales are also reported in Interventional Solutions, and financial results were reflected as of December 22, the date the acquisition closed.
Contact lens global growth of 7.7% reflects strong performance of our ACUVUE OASYS one-Day family of products, including the recent launch of ACUVUE OASYS MAX one-Day, strong commercial execution and market appropriate price actions. Growth was tempered by continued supply challenges. In the Orthopedics franchise, digital and enabling technologies reported in spine, sports and other continued to accelerate and drive pull-through sales in areas like hips and knees. For additional context, selling days had approximately a 60 basis point positive impact on results in the quarter.
Now turning to our consolidated statement of earnings for the fourth quarter of 2022. I'd like to highlight a few noteworthy items that have changed compared to the same quarter of last year. Cost of products sold deleveraged by 70 basis points primarily driven by onetime COVID-19 vaccine manufacturing related costs, unfavorable currency impact in the Pharmaceutical business, inflationary pressures as well as unfavorable mix with the enterprise, with a lower portion of sales coming from the Pharmaceutical business. Selling, marketing and administrative margins leveraged by 150 basis points. This represents a 9% reduction versus the prior year driven by phasing, with higher spend earlier in the year as well as proactive management of costs given the current inflationary environment.
We continue to invest strategically in research and development at competitive levels, investing 16.2% of sales this quarter. The $3.8 billion invested was an 18.6% reduction versus the prior year driven primarily by phasing with higher spend earlier in the year. Interest income was favorable to prior year by just over $100 million driven by higher rates of interest earned on cash balances. The other income and expense line was an expense of $1.2 billion in the fourth quarter of 2022 compared to an expense of $9 million in the fourth quarter of 2021. This was primarily driven by onetime COVID-19 vaccine manufacturing related exit costs, higher consumer health separation related costs, higher costs related to the Abiomed acquisition and lower gains on securities.
As we announced in Q2 2022, we continue to have commitments and obligations related to the COVID-19 vaccine, including external manufacturing network exit cost and required clinical trial expenses associated with the company's modification of its COVID-19 vaccine research program and manufacturing capacity to levels that meet all remaining customer contractual requirements.
Regarding taxes in the quarter, our effective tax rate was 16.2% versus 2.1% in the same period last year. The increase was primarily driven by more income in higher tax jurisdictions versus the prior year. Additionally, the company benefited from onetime tax items in the fourth quarter of 2021 that did not repeat in the current year. Excluding special items, the effective tax rate was 16.2% versus 10.4% in the same period last year. I encourage you to review our upcoming 2022 10-K filing for additional details on specific tax matters.
Lastly, I'll direct your attention to the box section of the slide, where we have also provided our income before tax, net earnings and earnings per share adjusted to exclude the impact of intangible amortization expense and special items.
Now let's look at adjusted income before tax by segment. In the fourth quarter of 2022, our adjusted income before tax for the enterprise as a percentage of sales increased from 25.6% to 31.3%. Pharmaceutical margins improved from 33.9% to 38.2% primarily driven by SG&A and R&D phasing, with higher spend earlier in the year, partially offset by the negative impact of currency and cost of products sold. MedTech margins improved from 18.1% to 25.3% primarily driven by SG&A and R&D phasing, with higher spend earlier in the year, favorable portfolio mix and supply chain efficiencies, partially offset by inflationary pressures. Finally, Consumer Health margins improved from 18.6% to 22% driven by brand marketing phasing, with higher spend earlier in the year and supply chain efficiencies, partially offset by inflationary pressures.
This concludes the sales and earnings portion of the Johnson & Johnson fourth quarter and full year 2022 results. I'm now pleased to turn the call over to Joe Wolk. Joe?