Johnson & Johnson beats estimates as drug sales offset medtech weakness

Johnson & Johnson second-quarter sales rose 6.6% to $25.31 billion, as strength in prescription drugs more than offset a weaker medical-device business and helped the company lift its full-year outlook. Adjusted earnings reached $2.90 a share, ahead of Wall Street’s $2.85 estimate, while reported earnings were $2.27 a share.

The company’s Innovative Medicine unit grew 6.8% on an operational basis, led by Tremfya and Darzalex, with additional support from CARVYKTI, TECVAYLI and RYBREVANT/LAZCLUZE. The quarter was J&J’s first sales report above $25 billion, and the company is on track to top $100 billion in annual revenue for the first time in its 140-year history.

Medtech was the weak spot. Sales in the division came in at $8.93 billion, just under analysts’ average estimate of $8.97 billion. In afternoon trading on July 15, Johnson & Johnson shares were last indicated down 2.69% at $247.02.

The softest corner of the device business was Impella, the heart pump line J&J acquired through its 2022 purchase of Abiomed. Chief financial officer Joseph Wolk said demand took a hit after a United Kingdom study raised questions about using the pumps in certain high-risk coronary procedures. Impella revenue fell 2% in the quarter after rising 14% in the first quarter, and Wolk said additional data expected in the first half of next year should help support the franchise.

Tim Schmid, who runs J&J’s medtech business, said the company was not seeing meaningful evidence of slower procedure volumes across its portfolio. Procedure volumes remained stable even as some hospital operators warned about weaker surgical activity and more patients dropping out of Affordable Care Act plans. J&J’s free cash flow for the quarter was about $8.7 billion.

J&J raised its 2026 outlook, lifting the midpoint of reported sales to $101.1 billion and the midpoint of adjusted earnings to $11.68 a share. The adjusted operational EPS midpoint is now $11.58. Chief executive Joaquin Duato said the quarter showed the “power” of J&J’s innovation, portfolio depth and pipeline momentum.