Johnson & Johnson reported third-quarter revenue of $25.4B, topping Wall Street's $25.28B estimate. Pharmaceutical sales grew 7.7%, carrying the quarter.
Adjusted earnings per share came in at $2.59, ahead of the $2.54 consensus. The company raised full-year guidance to $101.2B in sales and $11.10 in adjusted EPS at the midpoint.
Tremfya is replacing the Stelara revenue J&J lost
Sales of Tremfya, the company's psoriasis and inflammatory bowel treatment, jumped 68% to $2.4B. That growth is doing the heavy lifting against the Stelara patent cliff, the revenue hole left when the older blockbuster lost exclusivity.
The drug bench behind it runs deep, with Darzalex and Carvykti also supporting growth as the pharmaceutical unit grew 6.8% in the second quarter of 2026.
J&J is now approaching $100B in annual sales for the first time. The company trades at 23.6x forward earnings, a premium investors have tolerated because the replacement revenue keeps showing up. It's also a Dividend King, with 64 straight years of dividend increases.
MedTech is the soft spot
MedTech sales rose just 2.5%, held back by three separate pressures.
Middle East conflict has pushed government healthcare budgets elsewhere, European austerity is squeezing device spending, and Chinese pricing pressure continues to bite.
"Shifting healthcare budgets toward defense."
Joe Wolk, Johnson & Johnson
Sales of Abiomed heart pumps stayed slow after a UK study raised safety concerns. Soft device growth and international weakness overshadowed the earnings beat.
Analysts still hold a Strong Buy consensus on the shares. The quarter reads as two companies under one roof. One is a pharmaceutical business compounding through a patent cliff that was supposed to hurt far more than it has.
The other is a device unit whose customers are governments and hospital systems making budget choices J&J can't control. Higher guidance suggests management expects the first to keep outrunning the second through year-end.
