Johnson & Johnson raised its 2026 guidance after third-quarter sales increased 5.9% to $25.4 billion, but a large legal and transaction charge reduced reported earnings to $210 million. The contrast matters because the operating businesses grew while special items obscured the quarter's underlying profitability.
Guidance moves higher
The company raised the midpoint of estimated full-year reported sales to $101.2 billion from $101.1 billion, implying 7.4% growth. It also increased the adjusted earnings-per-share midpoint by $0.06 to $11.10, or 2.9% growth. Adjusted operational sales growth guidance, which excludes currency and the net effect of acquisitions and disposals, moved to 6.6% from 6.5%.
Third-quarter adjusted EPS was $2.59, down 7.5% from a year earlier, even as sales grew. Reported EPS fell to $0.09 from $2.12. Johnson & Johnson said the reported decline reflected a proposed talc litigation resolution, the acquisition of Firefly Bio and a strategic collaboration with Sail Biomedicines. Prepared remarks specified that the ovarian talc proposal contributed a $5.5 billion charge.
Medicines carry the growth
Innovative Medicine sales reached $16.8 billion and grew 7.9% on an operational basis. Cancer treatments including Darzalex, Carvykti, Tecvayli and Rybrevant with Lazcluze contributed to growth, along with Tremfya, Erleada, Spravato and Caplyta.
Stelara moved in the opposite direction as competition reduced sales. The product had an approximately 6.9 percentage-point negative effect on the division's operational growth rate. That is a specific erosion investors need to track because newer products must replace a large established franchise rather than merely add growth on top of it.
MedTech sales rose 2.5% to $8.6 billion, supported by electrophysiology, Shockwave products, contact lenses and trauma devices. U.S. sales grew 9.1% to $15 billion, while reported international growth was 1.5% to $10.4 billion.
The evidence behind the outlook
Regulatory progress supports management's confidence. The quarter included market authorization for the OTTAVA robotic surgery system, approval of IMAAVY for warm autoimmune hemolytic anemia and priority review for RYBREVANT FASPRO in advanced head and neck cancer. These milestones do not guarantee commercial success, but they broaden the pipeline that must offset patent and product-cycle pressure.
The decisive measures now are Stelara's decline, uptake for the newer medicines and the timing and final terms of the talc resolution. Sales above $100 billion would be a company milestone, but investors should judge the quality of that growth by adjusted profit conversion and the cost of legal settlements, not revenue alone.