Latest quarter
Johnson & Johnson reported Q3 FY2026 revenue of $25.4 billion, up 5.86% from $24.0 billion a year earlier. The consensus comparison showed revenue was 0.15% below the consensus, while adjusted EPS of $2.59 exceeded the $2.53 consensus by 2.37%.
The filing shows Innovative Medicine sales of $16.8 billion, up 7.90%, while MedTech sales were $8.6 billion and rose 2.50%. The filing attributed Innovative Medicine’s growth partly to oncology, while it said the decline in STELARA sales due to biosimilar competition reduced worldwide operational sales growth. It also reported a 1.00% operational sales decline in Surgery, citing China volume-based procurement, its surgery transformation program, Middle East disruptions and competitive pressures.
Johnson & Johnson reported diluted EPS of $0.09, versus $2.12 a year earlier. The filing said the quarter included charges related to the proposed talc ovarian litigation resolution and acquired in-process research and development. Gross margin was 68.1%, compared with 69.6%, and operating margin was 0.13%, compared with 31.2%.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $25.4 billion | $24.0 billion | 5.86% |
| Diluted EPS | $0.09 | $2.12 | −96.0% |
| Gross margin | 68.1% | 69.6% | −1.4 percentage points |
| Operating margin | 0.13% | 31.2% | −31.1 percentage points |
| Free cash flow | $7.4 billion | $2.9 billion | 154.8% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.59 | $2.53 | Beat by 2.37% |
| Revenue | $25.4 billion | $25.4 billion | In line |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
Joaquin Duato said Johnson & Johnson’s Q3 performance was led by Innovative Medicine, where sales grew 7.90%, and said oncology grew 17.0%. He said the company’s launches and pipeline were intended to support growth through the end of the decade, and that Johnson & Johnson expects oncology sales to exceed $50.0 billion by 2030.
Duato said MedTech sales grew 2.50%, while management had expected more from the segment. He said performance in cardiovascular and surgery was affected by pressure outside the U.S., and he cited physician patient-selection practices as affecting Abiomed’s performance. He said the company was pursuing clinical evidence and commercial actions in MedTech, including work around heart recovery and surgery.
Joseph J. Wolk said the company completed the acquisition of Firefly Bio and entered a collaboration with Cell BioMedicines. He said the Firefly Bio and Cell BioMedicines transactions are expected to reduce FY2027 adjusted EPS by −$1.36. Wolk also said Johnson & Johnson remained confident in FY2026 free cash flow guidance of $21.0 billion.
Analysts asked Timothy Schmid about Abiomed, international MedTech performance and Surgery. Schmid said Abiomed’s slowdown reflected a study outside the U.S. focused on high-risk PCI, and said management was responding through education and clinical evidence. He said the company was not seeing changes in patient need or reimbursement access, and that it did not view the issue as structural.
Schmid said international Surgery was affected by China volume-based procurement, the transformation program and disruption in the Middle East. He said conflict-related disruption had extended to ordering patterns, tender timing and spending decisions across more countries. Schmid said Johnson & Johnson expects MedTech revenue to return to growth in Q4 FY2026.
Guidance
Joseph J. Wolk said Johnson & Johnson raised and tightened its FY2026 operational sales-growth outlook to 6.70%–7.10%, with operational sales of $100.5 billion–$100.9 billion. He said the company now expects adjusted operational EPS of $10.95–$11.05 and non-GAAP EPS of $11.05–$11.15. Wolk said Johnson & Johnson now expects an FY2026 effective tax rate of 17.0%–17.5% and a non-GAAP operating-margin decline of −0.60%.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| EPS, non-GAAP | FY2026 | $11.05–$11.15 | — | New |
| EPS, Adjusted Operational | FY2026 | $10.95–$11.05 | — | New |
| Revenue, Operational | FY2026 | $100.5 billion–$100.9 billion | — | New |
| Revenue growth, Adjusted Operational | FY2026 | 6.40%–6.80% | — | New |
| Revenue, Medtech | Q4 FY2026 | Johnson & Johnson expects MedTech revenue to return to growth in Q4 FY2026. | — | — |
| EPS, non-GAAP | FY2027 | −$1.36 | — | New |
| Free cash flow | FY2026 | $21.0 billion | — | New |
| EPS, Non Gaap Operational | FY2026 | $10.95–$11.05 | — | New |
| Tax rate | FY2026 | 17.0%–17.5% | — | New |
| Operating margin, non-GAAP | FY2026 | −0.60% | — | New |
| Revenue growth | FY2026 | 6.70%–7.10% | — | New |