Categories Analysis, Health Care, Technology, Trending Stocks

Three companies that are haunted by multiple lawsuits

Several companies have battled lawsuits from time to time for various reasons. However, sometimes companies face thousands of lawsuits for one reason. Here is a look at three companies that continue to be plagued by multiple lawsuits and face possibilities of huge penalties:

Johnson & Johnson

Johnson & Johnson (NYSE: JNJ) faces around 50,000 cases on several of its products from talc to artificial hips to blood thinner Xarelto. Forbes has estimated the cost of settling all these lawsuits at $6 billion. Apart from this, last month, Johnson & Johnson was ordered to pay $572 million for its role in the opioid crisis in Oklahoma.

J&J’s litigation expenses increased to $2 billion in 2018 from $1.3 billion in 2017. As the litigation expense increases, it continues to increasingly impact earnings. At the end of the second quarter of 2019, the company had cash of $14.4 billion.

Although this amount is sufficient to settle the estimated $6-billion cost of lawsuits, it still amounts to nearly half of the company’s cash reserve and taking such a heavy cut does not bode well for the company. In the trailing 52 weeks, the company’s stock has dropped 6%.

Monsanto-Bayer

When Bayer acquired Monsanto, it ended up taking on Monsanto’s legal troubles. The German company reportedly faces over 18,000 lawsuits related to the weedkiller Roundup and could end up paying around $8 billion to settle them. Bayer’s stock has dropped over 8% in the past one year.

Last month, Bayer announced the sale of its animal health business to Elanco for $7.6 billion.

Also read: WeWork IPO delay: Causes and impact

Google

Alphabet’s (NYSE: GOOGL) subsidiary Google is another company that faces multiple lawsuits on various grounds. Google has been accused of several privacy violations and questionable data collection methods.

Also Read:  Corcept Therapeutics Incorporated (NASDAQ: CORT) Q1 2020 Earnings Call Transcript

In July, the company settled two lawsuits, one related to alleged age discrimination and the other on grounds that its Street View vehicles collected private information from unsecured Wi-Fi networks. The first settlement amounted to $11 million and the second one totaled $13 million.

Google has various other lawsuits pending and the company also faces antitrust probes from 50 states. In the second quarter of 2019, Google’s revenue totaled $38 billion. While these litigation amounts appear to be miniscule compared to the company’s revenue, these expenses still take a toll on the earnings.

We’re on Apple News! Follow us to receive the latest stock market, earnings and financial news at your fingertips.

Most Popular

Salesforce (CRM) Q1 2021 earning infographic

Salesforce (NYSE: CRM) reported first-quarter earnings results for fiscal 2021 after the regular trading hours on Thursday. The results were better than analysts' projections. Meanwhile, the stock fell over 3%

A visual dashboard of Nordstrom (JWN) Q1 2020 earnings results

Nordstrom (NYSE: JWN) swung to a loss in the first quarter of 2020 hurt by the COVID-19 related charges. The fashion retailer reported a loss of $3.33 per share compared

A visual representation of Ulta Beauty (ULTA) Q1 2020 earnings results

Ulta Beauty Inc. (NASDAQ: ULTA) reported its financial results for the quarter ended May 2, 2020, on Thursday after the market closes. The results missed analysts' expectations. The company slipped

One thought on “Three companies that are haunted by multiple lawsuits

Comments are closed.

Top