Johnson & Johnson slips after quarterly beat and higher 2026 outlook

Johnson & Johnson reported second-quarter revenue of $25.31 billion, up 6.6% from a year earlier and above the $25.05 billion LSEG consensus, while adjusted earnings of $2.90 a share beat the $2.85 estimate, according to CNBC. The company also raised its full-year outlook, though its shares were down more than 2% in afternoon trading after the results.

The reaction came despite broader evidence of growth across the health-care group’s pharmaceutical business and its updated forecast for more than $100 billion in annual sales. CNBC’s Investing Club said it raised its price target on the stock to $275 from $265 and maintained a buy-equivalent rating, while disclosing that Jim Cramer’s charitable trust owns Johnson & Johnson shares.

Guidance moves higher

Johnson & Johnson now expects operational sales growth of 6.5% to 7.1% for the full year, compared with its April range of 5.9% to 6.9%, CNBC reported. Reported sales are forecast at $100.8 billion to $101.4 billion, up from a prior range of $100.3 billion to $101.3 billion.

The company lifted adjusted earnings guidance to $11.60 to $11.75 a share, from $11.45 to $11.65. At the midpoint, CNBC said the new range implies 8.2% growth, compared with 7.1% under the prior outlook. Johnson & Johnson also guided for about 75 basis points of adjusted pretax operating margin expansion, up from a previous expectation of at least 50 basis points.

Other guidance items also improved. Net interest expense is now expected at $250 million to $300 million, down from $300 million to $400 million. The projected effective tax rate moved to 17% to 18%, compared with the prior 17.5% to 18.5% range.

MedTech weakness draws scrutiny

The main pressure point in the quarter was Johnson & Johnson’s medical-device division, MedTech. CNBC reported that cardiovascular sales were $2.4 billion, below expectations of $2.55 billion, as sales of Abiomed heart pumps declined.

Even with that shortfall, the wider MedTech business grew. Worldwide MedTech sales rose 3.6% on an operational basis and 4.5% on a reported basis, according to CNBC, with strength elsewhere in the portfolio partly offsetting the cardiovascular miss.

Chief Financial Officer Joe Wolk told CNBC that the cardiovascular unit “didn’t meet our standards” and said MedTech chair Tim Schmid and his team were focused on fixing the issue into next year. Wolk characterized the problem as acute and said Johnson & Johnson’s breadth allowed it to exceed Wall Street expectations and raise guidance even without a perfect report.

Drug portfolio offsets Stelara pressure

Johnson & Johnson’s Innovative Medicine unit, its pharmaceutical business, posted worldwide sales growth of 6.8% on an operational basis and 7.8% on a reported basis, CNBC reported. Excluding Stelara, which has lost patent protection and is facing lower-cost biosimilar competition, the business grew more than 14%.

The oncology portfolio grew 17.3%, supported by nearly 50% growth in Carvykti, 19% growth in Darzalex and nearly 57% growth in Tecvayli. All three treat multiple myeloma. Darzalex remained Johnson & Johnson’s largest single medicine by sales, with quarterly revenue above $4 billion, although it came in slightly below Wall Street expectations, according to CNBC.

Rybrevant, a lung cancer treatment, grew more than 61%. Chief Executive Joaquin Duato said on the earnings call that Johnson & Johnson asked the U.S. Food and Drug Administration during the quarter to expand Rybrevant’s license to cover head and neck tumors.

Neuroscience sales rose 13.9%, helped by 71% growth for Caplyta and more than 41% growth for Spravato. Duato said Caplyta new patient starts were up 122% from a year earlier after an April FDA approval for prevention of relapse in schizophrenia. Johnson & Johnson acquired Caplyta through its $14.6 billion purchase of Intra-Cellular Therapies, which closed in April 2025.

In immunology, sales fell just under 4% as Stelara declined. Tremfya sales rose more than 72%, helped by expanded use in Crohn’s disease and ulcerative colitis. Duato also cited early momentum for Icotyde, a once-daily oral IL-23 medicine approved in March for moderate-to-severe plaque psoriasis, and said more than 10,000 patients had begun treatment since launch.

This story draws on original reporting from CNBC.