J&J falls premarket despite raised earnings guidance

Johnson & Johnson (JNJ) shares were down 1.4% in premarket trading on Tuesday after the healthcare giant reported third-quarter results broadly in line with expectations and raised its full-year 2026 sales and adjusted earnings guidance.

The company now expects adjusted earnings for the full year to be in the range of $11.05 to $11.15 a share ($11.10 at midpoint), up from a prior expectation of $10.96 to $11.11. Sales are estimated in the range of $101.0B – $101.4B, implying a midpoint of $101.2B and up from a prior view of $100.8B – $101.4B.

For the third quarter, Johnson & Johnson (JNJ) reported revenue of $25.4B, up 5.9% year over year, while adjusted earnings of $2.59 per share beat analyst estimates by $0.06. Revenue was in line with consensus expectations.

Reported earnings per share came in at $0.09, reflecting a one-time special charge related to the proposed talc litigation resolution, the acquisition of Firefly Bio and a strategic collaboration with Sail Biomedicines. Adjusted EPS of $2.59 also reflected the impact of these transactions, J&J said.

By segment, Innovative Medicine worldwide operational sales grew 7.9%, with divestitures negatively impacting growth by 10 basis points. Growth was driven by Tremfya, a newer autoimmune drug, and newer products in the company’s immunology portfolio. Sales of Caplyta, a psychiatric drug, surged 66% as prescriptions for newer uses began contributing, including its use as an add-on treatment for depression.

Tecvayli, which treats multiple myeloma, recorded sales growth of nearly 77%. Darzalex, J&J’s top-selling multiple myeloma drug, posted double-digit growth but fell short of analyst expectations.

Johnson & Johnson’s (JNJ) medical device unit reported worldwide operational sales growth of 2.5%, primarily driven by electrophysiology products and Shockwave in Cardiovascular, contact lenses in Vision, as well as trauma in Orthopaedics.

Weighing on the results, Edmund Ingham, Investing Group Leader for Haggerston BioHealth, said, "JNJ has delivered a strong set of earnings with its medicines division growing 8% year-on-year, and MedTech 2.5%. US revenues grew by 9%, and international revenues by 1.9%. The Pharma has shared guidance for >$100bn of full-year 2026 revenues. Of most interest however may be the fact that Q3 EPS of $0.09 reflects the impact of JNJ's proposed talc litigation settlement of $5.5bn, with first payment of up to $3bn due 2027. The issue has affected JNJ for many years, but will claimants agree to this latest proposal?"