J&J raises 2026 outlook as $5.5bn talc charge shrinks quarterly profit to $210m

by Sophie Whitcombe · October 15, 2026

Companies Correspondent, The Harbour Post

Johnson & Johnson raised its full-year sales and earnings guidance on 13 October after third-quarter revenue grew faster than the company had planned, while a charge tied to its proposed settlement of talc litigation wiped out almost all of its reported profit for the period. Worldwide sales rose 5.9% to $25.4bn in the three months to the end of September, according to the results filed with the US Securities and Exchange Commission. Net earnings fell to $210m from $5.15bn a year earlier, and diluted earnings per share dropped to $0.09 from $2.12.

The collapse in the bottom line stems from the company's decision in late July to commit $5.5bn to resolve roughly 76,000 outstanding ovarian talc claims. The non-GAAP reconciliation accompanying the results shows pre-tax litigation-related special items of $5.52bn, alongside $339m of impairments on in-process research and development and $369m of costs linked to the planned separation of the orthopaedics business. Excluding those items, adjusted earnings per share were $2.59, down 7.5% from a year earlier.

The operating picture was considerably brighter. Innovative Medicine, the pharmaceutical division, grew sales 7.7% to $16.8bn. The company said the growth came despite a headwind of roughly 690 basis points from Stelara, the immunology blockbuster whose sales more than halved to $716m as biosimilar competition took hold. Tremfya, the successor product, rose 68% to $2.4bn, while the multiple myeloma franchise continued to expand: Darzalex sales climbed 15% to $4.24bn, Carvykti rose 36% to $710m and Tecvayli increased 77% to $312m. Rybrevant and Lazcluze, in lung cancer, grew 62% to $320m.

MedTech was the weaker half of the business. Segment sales rose 2.5% to $8.6bn, led by electrophysiology, the Shockwave cardiovascular business, contact lenses and trauma products. BioSpace reported that the figure was around 2% below analyst consensus, and that chief financial officer Joseph Wolk called the device performance disappointing while promising further internal investment. Shares fell about 4% in early trading on the day, according to the same report.

Geographically, the growth was lopsided. US sales rose 9.1% to $15.0bn, while international revenue increased only 1.5% to $10.4bn, with currency shaving 0.3 percentage points off the reported figure.

Management nonetheless lifted its forecasts for the year. J&J now expects reported sales of $101.0bn to $101.4bn, a midpoint of $101.2bn, compared with the $100.8bn to $101.4bn range it gave on 29 July. Adjusted diluted EPS guidance moved up to $11.05 to $11.15, a six-cent increase at the midpoint to $11.10, implying growth of about 2.9% for the year. Chairman and chief executive Joaquin Duato said the results reflected the accelerating momentum of a focused portfolio and gave the company a clearer line of sight to double-digit growth by the end of the decade.

The quarter also brought a change at the top of the pharmaceutical business. Jennifer Taubert, who ran Innovative Medicine, is retiring, with Tom Cavanaugh taking over the division from September, the company said. Regulatory milestones listed in the release included FDA market authorisation for the Ottava surgical robot and priority review for Rybrevant Faspro in head and neck cancer. J&J also completed its acquisition of Firefly Bio and agreed a collaboration with Sail Biomedicines on in vivo CAR-T therapies.

The talc resolution itself remains conditional. Under the July terms, the first payment would be capped at $3bn and made in 2027, with nothing further due before 2028, and the agreement depends on lead plaintiff firms representing at least 95% of remaining ovarian claims signing on. Erik Haas, J&J's worldwide vice president of litigation, said at the time that the settlement would allow the company to put the matter behind it.

The next tests are whether the talc participation threshold is met, how the orthopaedics separation progresses after $369m of related costs this quarter, and whether MedTech growth picks up. J&J will give its first formal view of 2027 when it reports fourth-quarter and full-year results early next year.