The PPC function lets you weigh a company’s financial results in a particular product segment against those of its competitors.
IDENTIFYING THE BEST SET of peers to use to gauge the performance of a company can be a complicated undertaking. Consider a diversified company such as Johnson & Johnson: J&J makes products ranging from the anti-psychotic drug Risperdal to surgical stapling tools, to Neutrogena eye shadow. Its competitors in those areas may belong to entirely different industry groups in a categorization system such as the Global Industry Classification Standard developed by Standard & Poor’s and Morgan Stanley.
Type JNJ US <Equity> PGEO <Go> to display financial data for J&J’s three broad business areas using the Product/Brand/Geographic Segmentation function. In 2008, the New Brunswick, NewJerseybased company derived 38.5 percent of its revenue from pharmaceuticals, 36.3 percent from medical devices and diagnostics and 25.2 percent from consumer goods. So how is the company doing in those areas compared with its competitors?
The new Peer Product Comparison (PPC) function lets you easily locate competitors’ sales figures for all segments of a company’s operations. PPC uses Bloomberg’s new classification system that groups the diverse goods and services that companies produce into a hierarchy of standardized products so you can compare companies directly. The data for this analysis come from companies’ financial reports and information drawn from Bloomberg’s in-depth research.
To compare J&J’s sales in one area, such as pharmaceuticals, with those at up to 50 peer companies from around the world, type PPC <Go>, click on the arrow to the right of Measure and select Revenue. Then click on the arrow to the right of Region, select Global and press <Go>. Finally, click on Pharma Product Sales under the Standardized Products heading.
Among U.S. companies in 2008, J&J, with $18.4 billion in drug sales, was second only to Pfizer Inc., with $44.2 billion. (In January, New York—based Pfizer announced that it would acquire Madison, New Jersey—based Wyeth in a $68 billion cash advance online deal.) J&J’s pharmaceuticals revenue accounted for only 29 percent of total revenue, however, versus 94 percent for Pfizer. (In PPC but not in PGEO, data for Remicade, a treatment for autoimmune disorders, and Procrit, which is used for treating anemia, are included in a separate, biotechnology product sales category for J&J.)
THE GROWTH COLUMN in the lower-right corner of the screen displays the annualized change in pharmaceutical sales at J&J and its peers for the three years shown. Click on the Growth heading to sort the list by growth rates. J&J’s year-over-year growth ranking is shown in the center section of the screen. To the right of the growth rank is a market share figure: The Percent of Peers number shows the selected company’s portion of the total results for all of the peer companies displayed.
To compare J&J with other cosmetics makers, click on Beauty & Cosmetic Products Mfg under Standardized Products. Information about the current level of product classification hierarchy is displayed in the center section of the screen in blue and amber. If a competitor that you expected to see didn’t appear in your list, try clicking on the broader category in blue to the left of the category currently displayed, which is in amber.