Johnson and Johnson delivered the quarter it guided to and was sold for it. Third quarter sales rose 5.9 percent to $25.4 billion, with operational growth of 6.0 percent. Adjusted earnings of $2.59 a share beat the $2.53 consensus, though they fell 7.5 percent from a year earlier as deal costs landed. Reported earnings collapsed to $0.09 a share, and net earnings to $210 million from $5,152 million a year ago, because of a large one time charge for the proposed talc litigation resolution plus the Firefly Bio acquisition and the Sail Biomedicines collaboration.
The mix explains the market reaction. Innovative Medicine grew 7.7 percent to $16.8 billion, led by Tremfya, Darzalex and Carvykti, the growth engines meant to carry the company past Stelara biosimilar erosion. MedTech grew only 2.5 percent to $8.6 billion and missed both company and analyst expectations for a second straight quarter, with cardiovascular and surgery outside the United States named as the weak spots.
Management raised full year guidance anyway: reported sales of $101.0 to $101.4 billion, a $101.2 billion midpoint that would make 2026 the company’s first $100 billion revenue year, and adjusted earnings of $11.05 to $11.15 a share, with the midpoint raised by six cents to $11.10. The company also flagged about $0.64 a share of 2026 dilution from the Firefly and Sail transactions.
Shares fell 6 percent on the day. RBC Capital Markets analyst Trung Huynh, in the note the trade press quoted, called MedTech underwhelming, noted the lack of near term upside catalysts and the unclear timing of the milvexian blood thinner readout, and still judged the selloff excessive and a product of broader volatility. That combination, a raise punished on segment mix and catalyst scarcity, is the template the rest of the majors now report into: guidance alone is not clearing the bar this season.