Johnson & Johnson Raises 2026 Sales Outlook After Talc Charge

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• JNJ

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Johnson & Johnson (JNJ) raised its 2026 sales outlook after a third quarter in which reported sales growth slowed to 5.9% from 6.6% in the second quarter and GAAP earnings fell to $0.09 a share, reflecting the proposed talc resolution, the Firefly Bio acquisition and the Sail Biomedicines collaboration. [1][2][13]

The health care company’s October guidance table estimates full-year 2026 reported sales of $101.0 billion to $101.4 billion, or 7.2% to 7.6% growth, versus $100.8 billion to $101.4 billion, or 7.0% to 7.6%, in its comparison labeled July 29, 2026. Adjusted EPS guidance in the same comparison moved to $11.05 to $11.15, or 2.4% to 3.3% growth, from $10.96 to $11.11, or 1.6% to 3.0%. [1][3][4][5][6]

Chairman and Chief Executive Officer Joaquin Duato said the company’s “strong third-quarter performance and increased sequential growth reflect the accelerating momentum of our focused portfolio.” [1]

Reported sales were $25.399 billion, up 5.9% from $23.993 billion a year earlier. Operational growth was 6.0% and adjusted operational growth was 6.1%. [1][2] Net earnings were $210 million, down 95.9% from $5.152 billion. The $0.09 EPS reflected a special charge for the proposed talc litigation resolution, the Firefly Bio acquisition, and a Sail Biomedicines collaboration. [1][2] Adjusted EPS was $2.59, down 7.5% from $2.80. Adjusted net earnings were $6.339 billion. [1][2]

The pre-tax litigation-related adjustment was $5.519 billion, versus $15 million a year earlier. Other (income) expense, net, swung to a $5.780 billion expense from $478 million of income. [7][8] Gross profit margin was 68.1%. Research and development expense rose 26.7% to $4.652 billion, or 18.3% of sales, with a separate $339 million line item for in-process R&D impairments. [7][8] Estimated third-quarter year-to-date free cash flow was about $15.100 billion. [2]

U.S. sales were $14.959 billion, up 9.1% on a reported, operational, and adjusted operational basis. [2][9] International sales were $10.440 billion, up 1.5% reported, 1.8% operational, and 1.9% adjusted operational. [2][9] Europe sales were $5.405 billion. Western Hemisphere excluding the U.S. was $1.385 billion. Asia-Pacific and Africa were $3.650 billion. [9]

Innovative Medicine sales were $16.757 billion, up 7.7% reported, 7.9% operational, and 8.0% adjusted operational. [2][3][9][10] Growth was primarily driven by TREMFYA and new products in Other in Immunology, DARZALEX, CARVYKTI, TECVAYLI, RYBREVANT/LAZCLUZE, and ERLEADA in Oncology, and SPRAVATO and CAPLYTA in Neuroscience, partially offset by STELARA (an approximate 690-basis-point impact), SIMPONI/SIMPONI ARIA, and REMICADE in Immunology, OPSUMIT/OPSYNVI in Pulmonary Hypertension, and IMBRUVICA in Oncology. [3] U.S. Innovative Medicine sales were $10.447 billion. International Innovative Medicine sales were $6.310 billion. [9]

MedTech sales were $8.642 billion, up 2.5% on all three measures. [2][3][9][10] Growth was primarily driven by electrophysiology products and Shockwave in Cardiovascular, contact lenses in Vision, and trauma in Orthopaedics. [3] U.S. MedTech sales were $4.512 billion. International MedTech sales were $4.130 billion. [9]

The company received U.S. market authorization for OTTAVA, which it described as the world’s first table-integrated soft tissue robotic system, FDA approval of IMAAVY for warm autoimmune hemolytic anemia, and FDA priority review for RYBREVANT FASPRO in advanced head and neck cancer. [1][11] It also completed the Firefly Bio acquisition and announced a Sail Biomedicines collaboration on in vivo CAR-T programs. [11]

Reported GAAP restructuring expense was $181 million. A supply-chain program primarily in Innovative Medicine is expected to cost $650 million to $750 million and be substantially completed by the end of fiscal 2029. Surgery-franchise restructuring in MedTech is expected to be substantially completed by the end of fiscal 2026. The pre-tax adjustment for Orthopaedics separation-related items was $369 million. [7][8][12]

Duato said that progress, together with strategic investments, “gives us clearer line of sight to double-digit growth by the end of the decade.” [1]

Citations

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