A month has gone by since the last earnings report for Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) . Shares have added about 1.7% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Johnson & Johnson due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.

Q3 Earnings & Sales Beat Estimates

J&J’s third-quarter 2025 earnings came in at $2.80 per share, which beat the Zacks Consensus Estimate of $2.77. Earnings rose 15.7% from the year-ago period. 

Adjusted earnings exclude intangible amortization expense and special items. Including these items, reported earnings were $2.12 per share, up 91% year over year.

Sales were $24.0 billion, which also beat the Zacks Consensus Estimate of $23.74 billion.

Sales rose 6.8% from the year-ago quarter, reflecting an operational increase of 5.4% and a positive currency impact of 1.4%. Organically, excluding the impact of acquisitions/divestitures and currency, sales rose 4.4% on an operational basis. 

The Stelara loss of exclusivity (“LOE”) hurt revenue growth by 640 basis points in the quarter.

Third-quarter sales in the domestic market rose 6.2% to $13.7 billion. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, domestic sales rose 4.4% in the quarter.

International sales rose 7.6% on a reported basis to $10.3 billion, reflecting an operational increase of 4.4% and a positive currency impact of 3.2%. Excluding the impact of all acquisitions and divestitures on an adjusted operational basis, international sales rose 4.4% in the quarter.

Segment Details

Innovative Medicines Segment

J&J’s Innovative Medicines segment sales rose 6.8% year over year to $15.56 billion, reflecting a 5.3% operational increase and a positive currency impact of 1.5%. Excluding the impact of all acquisitions and divestitures and currency on an adjusted operational basis, worldwide sales rose 3.7%. Innovative Medicines sales beat the Zacks Consensus Estimate of $15.26 billion as well as our model estimate of $15.28 billion.

Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth. Xarelto and Simponi/Simponi Aria sales also rose in the quarter. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth. The sales growth was partially dampened by lower sales of Imbruvica and generic/biosimilar competition to drugs like Stelara and Zytiga. 

Stelara LOE negatively impacted Innovative Medicines segment growth by 1070 basis points. Excluding Stelara, J&J’s Innovative Medicines segment sales rose around 16%.

In the Innovative Medicines segment, sales in the United States rose 6.0%, while outside U.S. sales declined 4.3% on an operational basis.

Oncology

Darzalex sales rose 21.7% year over year to $3.67 billion in the quarter, driven by continued share gains across all lines of therapy, particularly the front-line setting, as well as market growth. Sales came marginally ahead of the Zacks Consensus Estimate of $3.66 billion and were in line with our model estimate.

Imbruvica sales declined 7.8% to $695.0 million due to rising competitive pressure in the United States (due to new oral competition) and the impact of Medicare Part D redesign. Imbruvica sales were, however, better than the Zacks Consensus Estimate of $683 million and our estimate of $674.6 million.

Erleada generated sales of $936.0 million in the quarter, up 18.4% year over year, driven by share gains and market growth, partially offset by the impact of Part D redesign.  Erleada sales missed the Zacks Consensus Estimate of $960.0 million as well as our model estimate of $952.0 million.

New drug Carvykti recorded sales of $524.0 million, up 83.5% year over year, driven by share gains and continued capacity expansion. Another new drug, Tecvayli, recorded sales of $177.0 million in the quarter, up 31.3% year over year.

Sales of Talvey were $122 million, up 60.8% year over year. Tecvayli and Talvey’s growth was driven by continued expansion into the community setting. 

Rybrevant/Lazcluze sales were $198 million compared with $89 million in the year-ago quarter, driven by a strong launch trajectory.

Zytiga sales declined 25.1% to $113.0 million in the quarter due to generic competition.

Immunology

Stelara sales declined 41.3% to $1.57 billion in the quarter due to the impact of biosimilar competition and Part D redesign. While U.S. sales of Stelara declined 42.3%, international sales declined 39.4% in the quarter. Stelara sales slightly outperformed the Zacks Consensus Estimate of $1.52 billion as well as our model estimate of $1.56 billion.

Several biosimilar versions of Stelara have been launched in the United States in 2025. According to patent settlements and license agreements, Amgen, Teva, Samsung Bioepis/Sandoz and some other companies have already launched Stelara biosimilars this year. 

Tremfya recorded sales of $1.42 billion in the quarter, up 41.3% year over year, driven by strong market growth across all indications, particularly the IBD indications. Tremfya sales beat the Zacks Consensus Estimate of $1.29 billion as well as our model estimate of $1.28 billion.

Simponi/Simponi Aria sales rose 32.9% to $687.0 million. Sales of Remicade rose 13.6% in the quarter to $476.0 million.

Neuroscience, PH and Other Drugs

In neuroscience, Spravato recorded sales of $459.0 million, up 61.5% year over year driven by strong demand trends. Caplyta, added from the April acquisition of Intra-Cellular Therapies, recorded sales of $240 million, up 13.4% on a sequential basis. Invega Sustenna/Xeplion/Invega Trinza/Trevicta sales declined 11.3% to $929.0 million in the quarter due to the impact of Medicare Part D redesign. 

Pulmonary hypertension (PH) drug Uptravi recorded sales of $484.0 million, up 5.6% year over year driven by market growth and inventory dynamics partially offset by the impact of Medicare Part D redesign. Another PAH drug, Opsumit, recorded sales of $578.0 million, down 0.8% year over year. 

Xarelto sales rose 7.4% in the quarter to $635.0 million. Prezista sales declined 11.6% to $397.0 million.  

MedTech Segment

MedTech segment sales came in at $8.43 billion, up 6.8% from the year-ago period, including an operational increase of 5.6% and a positive currency impact of 1.2%. MedTech segment sales beat the Zacks Consensus Estimate of $8.35 billion as well as our model estimate of $8.41 billion.

Excluding the impact of all acquisitions and divestitures, and currency, on an adjusted operational basis, worldwide sales rose 5.7%, driven by strong performance in Cardiovascular, Surgery and Vision.

In the MedTech segment, sales rose 6.6% in the United States and 4.5% outside of the United States on an operational basis. 

The MedTech business has improved in the past two quarters, driven by the acquired cardiovascular businesses, Abiomed and Shockwave, as well as in Surgical Vision and wound closure in Surgery. Improvements in J&J’s electrophysiology business also drove the growth

However, the company continues to face headwinds in China. Sales in China are being hurt by the impact of the VBP program. 

Cardiovascular (previously Interventional Solutions) sales grew 12.6% to $2.2 billion, driven by strong growth in electrophysiology and higher sales of Abiomed and Shockwave. The electrophysiology business has improved significantly, driven by increased Varipulse ablation catheter adoption and utilization. 

Worldwide Surgery rose 4.4% to $2.5 billion as growth in wound closure and biosurgery offset the impact of competitive pressure in energy and endocutters and VBP issues in China. Worldwide orthopedics rose 3.8% to $2.27 billion as hip and knee returned to growth in the quarter. Worldwide Vision rose 7.7% to $1.4 billion, driven primarily by contact lenses as well as double-digit growth in Surgical Vision.

JNJ Ups 2025 Sales Guidance

The company raised its sales expectations for 2025 to reflect a strong operational performance so far this year.

The sales guidance was raised from a range of $93.2 billion-$93.6 billion to $93.5 billion-$93.9 billion. 

The sales projection indicates growth in the range of 5.4%-5.9% versus the prior expectation of 5.1%-5.6%. Operational sales growth is expected in the range of 4.8%-5.3% (previously 4.5%-5.0%).

Adjusted operational sales (excluding currency impact, acquisitions/divestitures) growth is expected in the range of 3.5%-4.0% (previously 3.2%-3.7%).

The revenue figures exclude revenues from COVID-19 vaccine sales. 

The adjusted earnings per share guidance was maintained in the range of $10.80-$10.90. J&J did not raise the earnings range as a better operational outlook is expected to be offset by a higher annual effective tax rate and fourth quarter manufacturing investments. On an operational, constant-currency basis, adjusted earnings per share are expected to increase in the range of 8.2%-9.2% 

Adjusted pretax operating margin is still expected to improve by approximately 300 basis points, driven by cost savings and reduced acquired IPR&D costs.

The company now projects net interest expense to be between $0 million and $50 million versus prior expectation of between $0 million and $100 million. Adjusted tax rate is expected to be approximately 17.5% to 18% (previously 17% to 17.5%).

Preliminary Outlook for 2026

Along with the earnings release J&J said that the consensus estimates for 2026, for both top-and bottom line, are too low.

In 2026, J&J expects top-line growth of more than 5% while the consensus estimate is around 4.6%. EPS growth is expected to be similar to revenue growth. Adjusted earnings per share are expected to be around 5 cents more than the consensus of $11.39 per share.

J&J expects growth in both the Innovative Medicine and MedTech segments to accelerate in 2026.

In 2026, J&J expects accelerated growth in the Innovative Medicine segment despite the loss of exclusivity of Stelara. The growth is expected to be driven by its key products, such as Darzalex, Tremfya, Spravato and Erleada as well as new drugs like Carvykti, Tecvayli and Talvey and recently launched products, including Tremfya in IBD, Rybrevant plus Lazcluze in non-small cell lung cancer and Inlexzo in bladder cancer.

In the MedTech segment, J&J expects better growth than 2025 levels, driven by increased adoption of newly launched products across all MedTech platforms and increased focus on higher-growth markets.  J&J expects to launch new products like Shockwave C2 Aero catheter and Tecnis intraocular lens in the United States as well as regulatory submission for the OTTAVA robotic surgical system in 2026. These new products may also contribute to growth in 2026.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a flat trend in estimates review.

VGM Scores

Currently, Johnson & Johnson has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Johnson & Johnson has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.