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J&J to spin off consumer products and focus on drugs

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Johnson & Johnson plans to spin off its consumer health division that sells Listerine and Baby Powder to focus on pharmaceuticals and medical devices in the biggest shake-up in the U.S. company’s 135-year history.

The move by the world’s largest health products company follows similar announcements by conglomerates Toshiba and General Electric and underscores how big, diversified corporations are under pressure to simplify their structures.

This has particularly been the case in healthcare, where the slow-and-steady business of selling products such as shampoos and moisturizers has increasingly diverged from the high-risk, high-reward work of developing and marketing blockbuster drugs.

“We think these have evolved as fundamentally different businesses,” J&J Chief Executive Alex Gorsky said. He said the differences in the businesses had become particularly clear during the COVID-19 pandemic as consumers bought more products online.

The company said it was aiming to complete the separation in 18 to 24 months at a cost of $500 million to $1 billion. J&J shares, part of the Dow Jones Industrial Average, were up 1.5%.

“This is just an example of delivering value to shareholders by specializing the businesses,” said Shannon Saccocia, chief investment officer at Boston Private, which holds J&J stock and is part of SVB Financial Group.

Johnson & Johnson’s Band-Aids baby shampoo and cough remedies have long been the face of the company.

But its pharmaceutical and medical equipment business, which makes cancer treatments, vaccines and surgical tools, is on track for nearly $80 billion in sales this year, way ahead of the $15 billion its consumer products are expected to bring in.

The higher growth outlook comes despite disappointing sales of Johnson & Johnson’s COVID-19 vaccine following a string of production setbacks and fierce competition from rivals Pfizer Inc and Moderna.

 

(GRAPHIC: Consumer health projected to make up about 16% of J&J’s 2021 sales – https://graphics.reuters.com/JNJ-DIVESTITURE/gkplgdbnbvb/chart.png)

 

MONEY FOR DEALS?

Johnson & Johnson’s plan to hive off its consumer health business into a publicly traded company echoes a move by GlaxoSmithKline and Pfizer, which also plan to spin off their joint consumer health business next year.

German drugmaker Merck KGaA sold its consumer health division to Procter & Gamble Co in 2018.

“The firm’s timing is surprising, as we don’t see any major catalyst for the move. However, if the consumer division no longer holds the deep pockets of the combined company, the risk of future consumer product litigation – such as the large talc settlement – may decrease,” Morningstar analyst Damien Conover said in a research note.

Johnson & Johnson’s consumer division has faced a spate of lawsuits alleging its talcum powder for babies causes cancer, which the company has denied.

It has created a subsidiary to manage the multi-billion-dollar claims and said on Friday the decision to separate the consumer division had nothing to do with the lawsuits.

J&J stopped selling the baby powder in the United States and Canada last year.

“It’s important to state upfront that today’s announcement is separate and distinct from the talc liability and bankruptcy proceedings that were announced a few weeks ago,” said Chief Financial Officer Joseph Wolk.

J&J’s medical device and pharmaceuticals business has faced tens of thousands of lawsuits for products including DePuy and Pinnacle implants, surgical mesh products and Xarelto blood thinner.

Jeff Jonas, asset manager at GAMCO Investors, said a spin-off would allow the company to be more acquisitive.

“Ultimately, when they do finish the consumer spin-off, they’ll probably raise a little bit of cash and put a little bit of debt on the consumer business, which would give them more money to do deals,” he said.

Another analyst suggested the flurry of spin-offs suggested shareholders should be cautious.

“Historically, when the market becomes fully valued, we see a great number of spins being announced as companies look for alternate ways of creating more shareholder value,” said Jim Osman, founder of research firm Edge Consulting Group. “It’s something worth noting for the investor.”

 

(Reporting by Manas Mishra in Bengaluru; writing by Nick Zieminski; Editing by Arun Koyyur, Carmel Crimmins, David Clarke and Dan Grebler)

Business

Stop Asking Your Interviewer Cliché Questions

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Most job search advice is cookie-cutter. The advice you’re following is almost certainly the same advice other job seekers follow, making you just another candidate following the same script.

In today’s hyper-competitive job market, standing out is critical, a challenge most job seekers struggle with. Instead of relying on generic questions recommended by self-proclaimed career coaches, which often lead to a forgettable interview, ask unique, thought-provoking questions that’ll spark engaging conversations and leave a lasting impression.

English philosopher Francis Bacon once said, “A prudent question is one half of wisdom.”

The questions you ask convey the following:

  • Your level of interest in the company and the role.
  • Contributing to your employer’s success is essential.
  • You desire a cultural fit.

Here are the top four questions experts recommend candidates ask; hence, they’ve become cliché questions you should avoid asking:

  • “What are the key responsibilities of this position?”

Most likely, the job description answers this question. Therefore, asking this question indicates you didn’t read the job description. If you require clarification, ask, “How many outbound calls will I be required to make daily?” “What will be my monthly revenue target?”

  • “What does a typical day look like?”

Although it’s important to understand day-to-day expectations, this question tends to elicit vague responses and rarely leads to a deeper conversation. Don’t focus on what your day will look like; instead, focus on being clear on the results you need to deliver. Nobody I know has ever been fired for not following a “typical day.” However, I know several people who were fired for failing to meet expectations. Before accepting a job offer, ensure you’re capable of meeting the employer’s expectations.

  • “How would you describe the company culture?”

Asking this question screams, “I read somewhere to ask this question.” There are much better ways to research a company’s culture, such as speaking to current and former employees, reading online reviews and news articles. Furthermore, since your interviewer works for the company, they’re presumably comfortable with the culture. Do you expect your interviewer to give you the brutal truth? “Be careful of Craig; get on his bad side, and he’ll make your life miserable.” “Bob is close to retirement. I give him lots of slack, which the rest of the team needs to pick up.”

Truism: No matter how much due diligence you do, only when you start working for the employer will you experience and, therefore, know their culture firsthand.

  • “What opportunities are there for professional development?”

When asked this question, I immediately think the candidate cares more about gaining than contributing, a showstopper. Managing your career is your responsibility, not your employer’s.

Cliché questions don’t impress hiring managers, nor will they differentiate you from your competition. To transform your interaction with your interviewer from a Q&A session into a dynamic discussion, ask unique, insightful questions.

Here are my four go-to questions—I have many moreto accomplish this:

  • “Describe your management style. How will you manage me?”

This question gives your interviewer the opportunity to talk about themselves, which we all love doing. As well, being in sync with my boss is extremely important to me. The management style of who’ll be my boss is a determining factor in whether or not I’ll accept the job.

  • “What is the one thing I should never do that’ll piss you off and possibly damage our working relationship beyond repair?”

This question also allows me to determine whether I and my to-be boss would be in sync. Sometimes I ask, “What are your pet peeves?”

  • “When I join the team, what would be the most important contribution you’d want to see from me in the first six months?”

Setting myself up for failure is the last thing I want. As I mentioned, focus on the results you need to produce and timelines. How realistic are the expectations? It’s never about the question; it’s about what you want to know. It’s important to know whether you’ll be able to meet or even exceed your new boss’s expectations.

  • “If I wanted to sell you on an idea or suggestion, what do you need to know?”

Years ago, a candidate asked me this question. I was impressed he wasn’t looking just to put in time; he was looking for how he could be a contributing employee. Every time I ask this question, it leads to an in-depth discussion.

Other questions I’ve asked:

 

  • “What keeps you up at night?”
  • “If you were to leave this company, who would follow?”
  • “How do you handle an employee making a mistake?”
  • “If you were to give a Ted Talk, what topic would you talk about?”
  • “What are three highly valued skills at [company] that I should master to advance?”
  • “What are the informal expectations of the role?”
  • “What is one misconception people have about you [or the company]?”

 

Your questions reveal a great deal about your motivations, drive to make a meaningful impact on the business, and a chance to morph the questioning into a conversation. Cliché questions don’t lead to meaningful discussions, whereas unique, thought-provoking questions do and, in turn, make you memorable.

_____________________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

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Business

Canadian Natural Resources reports $2.27-billion third-quarter profit

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CALGARY – Canadian Natural Resources Ltd. reported a third-quarter profit of $2.27 billion, down from $2.34 billion in the same quarter last year.

The company says the profit amounted to $1.06 per diluted share for the quarter that ended Sept. 30 compared with $1.06 per diluted share a year earlier.

Product sales totalled $10.40 billion, down from $11.76 billion in the same quarter last year.

Daily production for the quarter averaged 1,363,086 barrels of oil equivalent per day, down from 1,393,614 a year ago.

On an adjusted basis, Canadian Natural says it earned 97 cents per diluted share for the quarter, down from an adjusted profit of $1.30 per diluted share in the same quarter last year.

The average analyst estimate had been for a profit of 90 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Oct. 31, 2024.

Companies in this story: (TSX:CNQ)

The Canadian Press. All rights reserved.

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Cenovus Energy reports $820M Q3 profit, down from $1.86B a year ago

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CALGARY – Cenovus Energy Inc. reported its third-quarter profit fell compared with a year as its revenue edged lower.

The company says it earned $820 million or 42 cents per diluted share for the quarter ended Sept. 30, down from $1.86 billion or 97 cents per diluted share a year earlier.

Revenue for the quarter totalled $14.25 billion, down from $14.58 billion in the same quarter last year.

Total upstream production in the quarter amounted to 771,300 barrels of oil equivalent per day, down from 797,000 a year earlier.

Total downstream throughput was 642,900 barrels per day compared with 664,300 in the same quarter last year.

On an adjusted basis, Cenovus says its funds flow amounted to $1.05 per diluted share in its latest quarter, down from adjusted funds flow of $1.81 per diluted share a year earlier.

This report by The Canadian Press was first published Oct. 31, 2024.

Companies in this story: (TSX:CVE)

The Canadian Press. All rights reserved.

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