The number that will look worse than the business
Johnson & Johnson opens the heavy part of the reporting season on Tuesday 13 October, before the US market opens, sharing the morning with UnitedHealth Group, JPMorgan and the other large banks. That makes it the first serious read on pharmaceuticals and medical devices this quarter. It also means the headline earnings figure will be scanned quickly, and the headline figure is engineered to disappoint.
Five analysts tracked by Zacks, as displayed on Nasdaq, expect adjusted earnings of $2.53 a share, within a range of $2.42 to $2.62, against $2.80 in the same quarter a year earlier. Two of the five lowered their numbers in the past four weeks. Taken at face value, that is a decline of about 10% in a year when revenue is expanding.
Stripping out the Firefly charge
The gap traces back to one transaction. Johnson & Johnson closed its $1 billion cash purchase of Firefly Bio on 29 July and flagged an in-process research and development charge of roughly $1 billion in the third quarter. The company does not strip such charges out of adjusted earnings, which is why the July guidance reduction hit the adjusted line as hard as the reported one.
Second-quarter adjusted net earnings of $7.08 billion and $2.90 a share imply about 2.44 billion diluted shares. On that base, $1 billion equates to roughly $0.41 a share. Adding it back lifts the underlying consensus to about $2.94, some 5% above the prior year. Not every model has been refreshed: Zacks' full-year consensus of $11.18 sits above the top of the company's own range.
Revenue is a cleaner gauge. FMP's estimate stands at $25.4 billion, about 5.9% higher than the $23.99 billion booked in the third quarter of 2025. TIKR data show the company has exceeded Street revenue estimates in each of the last five quarters.
Two guidance revisions inside a fortnight
On 15 July the company lifted 2026 adjusted earnings guidance to $11.60–11.75 and sales to $100.8–101.4 billion. Two weeks later, on 29 July, after closing Firefly and signing a collaboration with Sail Biomedicines, it cut adjusted earnings by about $0.64 to $10.96–11.11, a midpoint of $11.04, while leaving the sales range untouched. Firefly explains about $0.46 of the reduction and Sail about $0.18.
The forward effect is larger. The two deals trim 2027 adjusted earnings by roughly $1.36, of which $1.28 comes from Sail and hinges on development milestones and whether the company exercises its option. Commentary on the timing of those payments carries more weight for the share price than anything inside the quarter itself.
Share price context ahead of the print
The stock closed on Friday 9 October at $261.44, 26.3% above the $206.95 close of 31 December 2025 but 6.1% below the 2026 closing high of $278.43 set on 3 September. Most of that retreat occurred in five sessions, from $271.95 on 28 September to $252.93 on 5 October, a drop of 7.0% with no company announcement attached. On 29 September BofA lifted its price target to $278 while cautioning that third-quarter earnings could fall short of the Street, according to TIKR.
Immunology handover: Stelara out, Tremfya in
Innovative Medicine revenue reached $16.38 billion in the second quarter, up 7.8%, while MedTech delivered $8.93 billion, up 4.5%, or 3.6% operationally. Stelara, which lost US exclusivity to biosimilars in 2025, generated $740 million worldwide, down 55.2% from $1.65 billion, subtracting about 7.6 percentage points from Innovative Medicine growth. The replacements are expanding faster than the erosion.
| Product or unit | Q2 2026 sales | Change |
|---|---|---|
| Stelara | $740 million | down 55.2% |
| Tremfya | $2.05 billion | up 72.5% |
| Darzalex | $4.21 billion | up 18.9% |
| Carvykti | $657 million | up 49.4% |
| Orthopaedics | $2.42 billion | up 4.9% |
The 2027 cliff behind the growth claim
Simponi biosimilars reached Europe in the second quarter, with a possible US entrant later in 2026, according to the 10-Q. Speaking at a Deutsche Bank conference on 17 September, chief financial officer Joseph Wolk sized 2027 losses of exclusivity at "about $4 billion to $4.5 billion", comprising roughly $2 billion of Xarelto, roughly $1.5 billion of the pulmonary hypertension franchise and roughly $1 billion from Simponi and Stelara. He still guided to "equivalent reported growth" in 2027. Whether Tremfya and Darzalex hold their second-quarter momentum is the hinge on which that claim turns.
Orthopaedics exit and the tariff line
The separation of DePuy Synthes was announced in October 2025, and the 10-Q still targets completion within 18 to 24 months of that date through one of "multiple paths". Bloomberg reported on 11 September, according to TIKR, that Apollo was in talks to acquire the unit for close to $20 billion; no agreement had been disclosed as of 9 October. A sale rather than a spin-off would reset how investors value the remaining MedTech portfolio, which leans towards cardiovascular and surgery. The 10-Q also cites tariffs as a MedTech cost pressure that partly offsets other gross-margin gains, a drag that surfaces in operating margin before it touches revenue.
Talc becomes a payment schedule
The most consequential development since the last report is legal rather than commercial. On 27 July the company proposed a resolution covering the remaining ovarian talc litigation, roughly 76,000 claims, with a $5.5 billion commitment paid per claim, conditional on participation by at least 95% of those claims. The first payment is capped at $3 billion in 2027, with nothing further due before 2028. The proposal followed a 22 July order from the federal court in New Jersey asking plaintiffs to explain why their claims should not be dismissed for lack of proof of specific causation. At the end of the second quarter, the talc reserve carried a present value of about $3.7 billion; any top-up would sit in GAAP results rather than adjusted earnings.
Three ways Tuesday resolves
A clean beat would pair revenue above $25.4 billion with Tremfya and Darzalex at or above second-quarter growth rates, an ex-charge figure near $2.95 and a reaffirmed 2026 range, pushing the stock back towards the September high. A noisy outcome means a headline below $2.53 on charge timing with revenue in line, which the market should look through given the July disclosure. A genuine miss combines soft sales, faster Stelara erosion or weak MedTech with more guarded 2027 language.
In analyst Ruslan Averin's assessment, the earnings line is distorted by design this quarter, and the informative data points are revenue, the trajectory of Tremfya and Darzalex, the talc participation rate and any clarity on DePuy Synthes. With an investor day scheduled for 8 December, detailed 2027 framing may be held back until then.