By Michael Erman and Mrinalika Roy
Jan 21 (Reuters) – Johnson & Johnson on Wednesday forecast 2026 sales and profit ahead of Wall Street estimates, even with the expected impact of a drug pricing deal with the Trump administration and about $500 million it sees in tariffs on its medical devices business.
The company said the deal it struck with President Donald Trump earlier this month to cut some prescription drug prices would cost it “hundreds of millions of dollars.”
J&J is one of 16 big pharmaceutical companies that have reached agreements to lower U.S. drug prices in exchange for exemptions from Trump-imposed tariffs.
“We can’t disclose specific details, but it’s hundreds of millions of dollars,” Chief Financial Officer Joseph Wolk said in an interview. “It’s a credit to the team here that we were able to surpass what (analyst) expectations are for 2026 by a pretty sizable amount while digesting that impact.”
The company forecast 2026 sales of $99.5 billion to $100.5 billion, exceeding analysts’ estimates of $98.9 billion, according to LSEG data.
J&J expects full-year 2026 profit coming in at $11.43 to $11.63 per share. Analysts have forecast earnings of $11.45 per share.
“We are confident growth in 2026 will be faster than in 2025 and we have line of sight to double-digit growth by the end of the decade,” CEO Joaquin Duato said in a call to discuss company results.
TALC LITIGATION STILL LOOMS
On Tuesday, a court-appointed special master recommended that expert testimony linking the company’s talc products to ovarian cancer be allowed in court.
“The talc litigation concerns may be driving the stock down slightly,” said RBC Capital Markets analyst Shagun Singh. J&J shares were down nearly 1% in early trading. They gained roughly 43% in 2025.
Wolk said the company was encouraged by the special master’s decision to exclude opinions of certain plaintiffs’ experts. However, the CFO added that the court failed to properly assess the reliability of other expert testimony and said it plans to appeal those portions of the ruling.
“The decision only serves to bolster our overall litigation strategy,” Wolk said.
QUARTERLY EARNINGS BEAT
J&J also reported fourth-quarter 2025 profit ahead of expectations, buoyed by strong sales of blood cancer therapy Darzalex, solid growth in psoriasis drug Tremfya and resilience in its medical devices business.
“2025 was a catapult year… fueled by the strongest portfolio and pipeline in our history,” Duato said in a statement, adding that the company’s new cancer therapy Carvykti surpassed $1 billion in annual sales for the first time.
The upbeat performance comes as the company faces multiple challenges, including tariff uncertainty on its medical devices unit and rising competition for its blockbuster psoriasis drug Stelara from biosimilars. Stelara sales declined more than analysts had forecast.
“How nice is it that Stelara was down so much – maybe even more than analysts thought – and we still continue to grow?” Wolk said.
“If you just take Stelara out of that mix, that portfolio is growing 14%, 15%. Those are the products that we’re going to rely on for the next couple years and the balance of this decade.”
On an adjusted basis, the healthcare conglomerate earned $6 billion, or $2.46 per share, for the quarter, topping analysts’ expectations by 2 cents.
Quarterly revenue of $24.56 billion also exceeded Wall Street estimates of $24.16 billion.
The results were only modestly ahead of expectations, but J&J has shown that it can generate sustained revenue growth, J.P. Morgan analysts said.
Sales in the Innovative Medicine division, its largest, grew 10% to $15.76 billion in the quarter, beating estimates of $15.37 billion.
Sales in its medical devices business grew 7.5% to $8.80 billion, ahead of estimates of $8.69 billion.
(Reporting by Michael Erman in New Jersey; Additional reporting by Puyaan Singh and Mrinalika Roy in Bengaluru; Editing by Bill Berkrot and Devika Syamnath)
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