Johnson & Johnson (JNJ.US) Q3 earnings beat expectations and full-year guidance raised! Innovative medicine business gains momentum, medtech business still needs improvement.

On Tuesday before the U.S. market open, Johnson & Johnson (JNJ.US) reported better-than-expected third-quarter 2026 results and raised its full-year 2026 revenue and earnings guidance. The earnings report showed that Johnson & Johnson's third-quarter sales rose 5.9% year over year to $25.4 billion, in line with the market consensus. On profitability, net income under GAAP plunged 95.9% year over year to $210 million, with diluted earnings per share of just $0.09 (compared with $2.12 in the year-ago period), mainly due to a one-time pre-tax charge of $5.519 billion related to a proposed talc litigation settlement. Excluding one-time items and amortization of intangible assets, adjusted net income was $6.339 billion; adjusted earnings per share were $2.59, beating the market consensus of about $2.53, but still down 7.5% year over year (compared with $2.80 in the year-ago period); adjusted operating earnings per share excluding the impact of foreign exchange was $2.61. By business, Innovative Medicine revenue was $16.757 billion, up 7.7% year over year. Performance among core products was mixed: Darzalex revenue rose 15.4% year over year to $4.239 billion; autoimmune drug Tremfya revenue rose 68.3% year over year to $2.396 billion, exceeding the market expectation of about $2.19 billion; psychiatric drug Carvykti revenue rose 35.5% year over year to $710 million; Stelara revenue fell 54.4% year over year to $716 million due to generic competition, but still exceeded the market expectation of about $591 million thanks to an improved dosage mix. MedTech revenue was $8.642 billion, up 2.5% year over year. Chief Financial Officer Joe Wolk said that Middle East conflicts, European market tightening and pricing pressure in China created a "more pronounced" drag on international medical device sales, while the Abiomed ventricular assist pump business continued to be affected by the UK Impella study earlier this year. R&D investment rose 26.7% year over year to $4.652 billion, with R&D intensity rising to 18.3% from 15.3% in the year-ago period. On guidance, Johnson & Johnson raised the midpoint of its full-year 2026 reported sales guidance to $101.2 billion from about $101.1 billion (range of $101.0$101.4 billion), and raised the midpoint of its adjusted earnings per share guidance to $11.10 from $11.04 (range of $11.05$11.15), both above the market consensus. Chief Executive Officer Joaquin Duato said the quarter's "accelerating growth momentum" continued, and the company has a "clearer path to achieving double-digit growth by the end of this decade," but did not provide specific figures for 2027. On operational developments, during the third quarter, the OTTAVA soft tissue Siasun Robot&Automation surgical system received FDA marketing authorization, and new drug Imaaivy (nipocalimab) received FDA approval for warm antibody autoimmune hemolytic anemia; the company completed the acquisition of Firefly Bio and reached an in vivo CAR-T collaboration with Sail Biomedicines; Jennifer Taubert retired, and Tom Cavanaugh became worldwide chairman of the Innovative Medicine business.