Johnson & Johnson — Third Quarter 2026 Earnings Summary

Financial Performance

• Reported sales for Q3 2026 reached $25.4 billion, a 5.9% year-over-year increase compared to $23.993 billion in Q3 2025.
• Operational sales growth was 6.0%, while adjusted operational sales growth was 6.1%.
• Reported net earnings were $210 million, a 95.9% decrease from $5.152 billion in Q3 2025, impacted by a one-time special charge for the proposed talc litigation resolution, the acquisition of Firefly Bio, Inc., and the strategic collaboration with Sail Biomedicines.
• Reported diluted EPS was $0.09, down 95.8% from $2.12 in Q3 2025.
• Adjusted net earnings were $6.339 billion, a 6.8% decrease from $6.801 billion in Q3 2025.
• Adjusted diluted EPS was $2.59, a 7.5% decrease from $2.80 in Q3 2025.
• Free cash flow was approximately $15.1 billion for the quarter, compared to $14.226 billion in Q3 2025.
• U.S. reported sales grew 9.1% to $14.959 billion; International reported sales grew 1.5% to $10.440 billion.

Guidance and Future Outlook

• The company raised its full-year 2026 estimated reported sales guidance to a midpoint of $101.2 billion, representing 7.4% growth, up from a previous midpoint of $101.1 billion (7.3% growth).
• Adjusted EPS guidance was increased by $0.06 to a midpoint of $11.10, representing 2.9% growth, up from a previous midpoint of $11.04 (2.3% growth).
• Adjusted operational sales guidance was raised to a midpoint of 6.6% growth (range 6.4%–6.8%), up from a previous midpoint of 6.5% (range 6.2%–6.8%).
• Management stated that strategic investments and portfolio momentum provide a clearer line of sight to double-digit growth by the end of the decade.

Business Segments and Product Lines

• Innovative Medicine: Worldwide operational sales grew 7.9%, driven by TREMFYA, new immunology products, DARZALEX, CARVYKTI, TECVAYLI, RYBREVANT/LAZCLUZE, ERLEADA, SPRAVATO, and CAPLYTA. Growth was partially offset by declines in STELARA (approx. 690 basis points impact), SIMPONI/SIMPONI ARIA, REMICADE, OPSUMIT/OPSYNVI, and IMBRUVICA.
• MedTech: Worldwide operational sales grew 2.5%, driven by electrophysiology products, Shockwave in Cardiovascular, contact lenses in Vision, and trauma in Orthopaedics.
• New Product Launches and Approvals:
  • Received FDA market authorization for OTTAVA, the world's first table-integrated soft tissue robotic system.
  • Received FDA approval for IMAAVY (nipocalimab-aahu) for warm autoimmune hemolytic anemia (wAIHA).
  • Received U.S. FDA Priority Review for RYBREVANT FASPRO for advanced head and neck cancer.
  • Received CE Marking for ACUVUE OASYS MAX Reusable Contact Lenses.
  • Announced MONARCH QUEST 3, advancing robotically-assisted bronchoscopy.

Market and Competitive Landscape

• No specific market share data or direct competitor comparisons were provided in the press release.
• The company highlighted positive Phase 3 results in multiple myeloma and sustained disease control data for IMAAVY in generalized myasthenia gravis.

Risks and Challenges

• The company noted uncertainty regarding the ultimate outcome of legal proceedings, including the proposed talc litigation resolution, which resulted in a one-time special charge affecting reported earnings.
• Forward-looking statements are subject to risks including economic factors, currency fluctuations, competition, regulatory approval uncertainties, patent expirations, and the ability to successfully execute the planned separation of the Orthopaedics business.

Management Commentary and Tone

• Joaquin Duato, Chairman and CEO, described the performance as "strong" with "accelerating momentum" in the focused portfolio.
• Management expressed confidence that recent breakthroughs and strategic investments provide a "clearer line of sight to double-digit growth by the end of the decade."

Other Key Points

• Completed the acquisition of Firefly Bio, Inc. to advance next-generation oncology innovation.
• Announced a strategic collaboration with Sail Biomedicines to advance in vivo CAR-T programs and transform autoimmune disease treatment.
• Announced a proposed resolution of ovarian talc litigation.
• Executive leadership change: Jennifer Taubert to retire as Executive Vice President; Tom Cavanaugh appointed EVP, Worldwide Chairman Innovative Medicine effective September.
• Presented new long-term data for ICOTYDE (icotrokinra) showing robust 2-year results in plaque psoriasis.
• Reported single-infusion CARVYKTI data showing five-year treatment-free remissions in 50% of patients in early-line relapsed/refractory multiple myeloma.
• Reported TECVAYLI + TALVEY data reducing the risk of disease progression or death by 89% in earlier-line relapsed/refractory multiple myeloma.
• Reported CAPLYTA data showing significant and rapid improvement in bipolar mania in a pivotal Phase 3 study.