Johnson & Johnson reported first-quarter revenue and profit above Wall Street estimates on Tuesday, driven by strong cancer drug sales, and provided its first forecast that accounts for trade tariffs imposed by U.S. President Donald Trump.
The healthcare conglomerate raised its 2025 sales forecast by $700 million to reflect the addition of schizophrenia drug Caplyta to its portfolio, but maintained its profit estimate to reflect the impact of tariffs and dilution from its $14.6 billion deal to buy neurological drugmaker Intra-Cellular.
J&J is the first major healthcare company to report results since the Trump administration proposed hefty duties on trade partners including China, a key source of raw ingredients and supplies for the pharmaceutical and medical device industries.
The White House is also moving ahead with a probe into imports of pharmaceuticals as part of a bid to impose tariffs on the sector on grounds that extensive reliance on foreign production of medicine is a national security threat.
J&J expects to earn $10.50 to $10.70 per share on an adjusted basis, including dilution of 25 cents from the Intra-Cellular deal.
Chief Financial Officer Joe Wolk in an interview said the profit outlook also takes into account about $400 million expected to be incurred due to tariffs in the company's medical device business from the second quarter.
He said the estimate reflects the impact of tariffs currently in place, including those on China, Mexico and Canada, even if some parts of those have been given a 90-day pause by the Trump administration.
J&J shares were off 1% at $153 in premarket trading. The stock is up 6.7% so far this year as it was largely protected from a market rout earlier this month when pharmaceuticals were exempted from the first round of reciprocal tariffs. The broader S&P Healthcare Index has gained about 1% this year.
J&J reported quarterly sales of $21.89 billion, up 2.4% from a year ago and above analysts' expectations of $21.56 billion, according to LSEG data.
On an adjusted basis, the company earned $2.77 per share in the quarter, topping analysts' estimates by 18 cents.
At least three analysts said the quarterly beat was driven by strong performance from the company's medicines business.
Investors are focusing more on the impact of tariffs and other macro factors on J&J and its peers, and less on the company's individual growth drivers, said Guggenheim analyst Vamil Divan.
The company now expects 2025 sales of $91.6 billion to $92.4 billion, up from its previous forecast of $90.9 billion to $91.7 billion.
Quarterly sales for the company's drugs business rose 2.3% to $13.87 billion, beating analyst expectations of $13.43 billion, while medical devices revenue was $8.02 billion, up 2.5% on the previous year but below Wall Street estimates of $8.17 billion.
Wolk said that the company still expected, as indicated in its January forecast, that its devices business will perform better in the second half of the year.
Pharmaceuticals revenue was buttressed by a 20% increase in Darzalex sales. The blood cancer therapy launched in 2015 brought in first-quarter sales of $3.24 billion, compared to analysts' expectations of $3.05 billion.
Sales of blockbuster psoriasis treatment Stelara, facing competition from biosimilars, fell more than 33% to $1.63 billion in the quarter, but still topped estimates of $1.42 billion.
Close copies of Stelara were launched in Europe, Canada and a few other markets last year and began selling in the U.S. this year.
The healthcare conglomerate raised its 2025 sales forecast by $700 million to reflect the addition of schizophrenia drug Caplyta to its portfolio, but maintained its profit estimate to reflect the impact of tariffs and dilution from its $14.6 billion deal to buy neurological drugmaker Intra-Cellular.
J&J is the first major healthcare company to report results since the Trump administration proposed hefty duties on trade partners including China, a key source of raw ingredients and supplies for the pharmaceutical and medical device industries.
The White House is also moving ahead with a probe into imports of pharmaceuticals as part of a bid to impose tariffs on the sector on grounds that extensive reliance on foreign production of medicine is a national security threat.
J&J expects to earn $10.50 to $10.70 per share on an adjusted basis, including dilution of 25 cents from the Intra-Cellular deal.
Chief Financial Officer Joe Wolk in an interview said the profit outlook also takes into account about $400 million expected to be incurred due to tariffs in the company's medical device business from the second quarter.
He said the estimate reflects the impact of tariffs currently in place, including those on China, Mexico and Canada, even if some parts of those have been given a 90-day pause by the Trump administration.
J&J shares were off 1% at $153 in premarket trading. The stock is up 6.7% so far this year as it was largely protected from a market rout earlier this month when pharmaceuticals were exempted from the first round of reciprocal tariffs. The broader S&P Healthcare Index has gained about 1% this year.
J&J reported quarterly sales of $21.89 billion, up 2.4% from a year ago and above analysts' expectations of $21.56 billion, according to LSEG data.
On an adjusted basis, the company earned $2.77 per share in the quarter, topping analysts' estimates by 18 cents.
At least three analysts said the quarterly beat was driven by strong performance from the company's medicines business.
Investors are focusing more on the impact of tariffs and other macro factors on J&J and its peers, and less on the company's individual growth drivers, said Guggenheim analyst Vamil Divan.
The company now expects 2025 sales of $91.6 billion to $92.4 billion, up from its previous forecast of $90.9 billion to $91.7 billion.
Quarterly sales for the company's drugs business rose 2.3% to $13.87 billion, beating analyst expectations of $13.43 billion, while medical devices revenue was $8.02 billion, up 2.5% on the previous year but below Wall Street estimates of $8.17 billion.
Wolk said that the company still expected, as indicated in its January forecast, that its devices business will perform better in the second half of the year.
Pharmaceuticals revenue was buttressed by a 20% increase in Darzalex sales. The blood cancer therapy launched in 2015 brought in first-quarter sales of $3.24 billion, compared to analysts' expectations of $3.05 billion.
Sales of blockbuster psoriasis treatment Stelara, facing competition from biosimilars, fell more than 33% to $1.63 billion in the quarter, but still topped estimates of $1.42 billion.
Close copies of Stelara were launched in Europe, Canada and a few other markets last year and began selling in the U.S. this year.
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