10-Q · April 22, 2026
Johnson & Johnson reported fiscal Q1 2026 sales of $24.062 billion, up 9.9% year-over-year (operational +6.4%, FX +3.5%) with segment strength in Innovative Medicine and MedTech. GAAP diluted EPS was $2.14, down versus…
Earnings analysis · 10-Q
JNJ earnings analysis
Filed October 21, 2026 · Our reading of the company's report
The latest report
Johnson & Johnson delivered solid Q3 revenue growth of 5.9% to $25.399 billion, led by Innovative Medicine, but GAAP profitability deteriorated sharply because of the $5.5 billion talc charge, $1.0 billion of Firefly…
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Johnson & Johnson delivered solid Q3 revenue growth of 5.9% to $25.399 billion, led by Innovative Medicine, but GAAP profitability deteriorated sharply because of the $5.5 billion talc charge, $1.0 billion of Firefly IPR&D expense and weaker segment margins. Gross margin fell 1.5 percentage points to 68.1%, while diluted EPS dropped to $0.09 from $2.12. Underlying cash generation remained strong, with $18.850 billion of nine-month operating cash flow and approximately $15.118 billion of free cash flow, but biosimilar and generic competition—particularly the 54.4% STELARA sales decline—remains a significant forward headwind.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.09
- Gross margin
- 68.1%
What stood out
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Revenue grew 5.9% year over year
Q3 sales increased 5.9% year over year to $25.399 billion from $23.993 billion. Revenue was approximately $0.09 billion above Q2 2026 sales of $25.31 billion.
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Innovative Medicine led growth
Innovative Medicine sales rose 7.7% to $16.757 billion, led by Oncology sales of $7.602 billion, up 16.4%, and Neuroscience sales of $2.375 billion, up 17.3%.
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MedTech growth was mixed
MedTech sales increased 2.5% to $8.642 billion. Shockwave sales grew 16.8% to $325 million and Vision sales grew 4.4% to $1.461 billion, partially offset by Surgery sales declining 0.6% to $2.528 billion.
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Strong year-to-date cash generation
Nine-month operating cash flow was $18.850 billion, while capital expenditures were $3.732 billion, producing approximately $15.118 billion of free cash flow. Capex increased 24.6% from $2.995 billion in the prior-year period.
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Key growth brands remained strong
TREMFYA sales increased 68.3% to $2.396 billion in Q3, while CARVYKTI sales increased 35.5% to $710 million and CAPLYTA sales increased 66.1% to $398 million.
What to watch
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Litigation and M&A charges crushed GAAP earnings
GAAP Q3 diluted EPS fell to $0.09 from $2.12, and net earnings declined to $210 million from $5.152 billion. Results included a $5.5 billion charge related to the proposed talc ovarian litigation resolution and approximately $1.0 billion of Firefly acquired in-process R&D expense.
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Margins deteriorated sharply
Gross margin declined to 68.1% from 69.6% year over year, while Q3 Innovative Medicine segment pretax margin fell to 30.2% from 41.4% and MedTech pretax margin fell to 9.0% from 15.3%. Management cited unfavorable product mix, higher amortization, restructuring, separation costs and impairments.
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Biosimilar and generic erosion intensified
STELARA sales fell 54.4% to $716 million in Q3 because of biosimilar competition; management states biosimilars will continue to negatively affect sales. SIMPONI biosimilars entered Europe in Q2 2026, with a potential U.S. entrant later in 2026, while potential generic entrants in 2027 may reduce UPTRAVI, OPSUMIT/OPSYNVI and XARELTO sales.
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Talc liabilities remain substantial
The talc reserve was approximately $9.0 billion as of Q3 2026, with approximately half recorded as a current liability, and approximately 76,500 U.S. plaintiffs had direct pending claims. The proposed ovarian resolution requires at least 95% participation by remaining claims.
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Liquidity and working capital absorbed cash
Cash and cash equivalents declined to $16.910 billion from $19.709 billion at year-end 2025, while inventory increased to $15.377 billion from $14.191 billion and trade receivables increased to $18.987 billion from $17.178 billion.
Management's outlook
The 10-Q provides no new quantitative revenue or EPS guidance. Management states it expects sufficient liquidity to fund operating needs, including approximately $9.0 billion of remaining talc obligations, $3.2 billion of current corporate bond maturities, approximately $2.6 billion for the potential Sail acquisition, and approximately $0.9 billion of remaining opioid settlements.
Earlier filings 4
10-K · February 11, 2026
Johnson & Johnson delivered fiscal 2025 sales of $94,193 million and net earnings from continuing operations of $26,804 million (diluted continuing EPS $11.03), driven by operating cash flow of $24,530 million and a…
10-Q · April 23, 2025
Johnson & Johnson reported fiscal Q1 2025 revenue of $21.893 billion, up 2.4% year‑over‑year, and diluted EPS of $4.54 driven largely by a one‑time talc reserve reversal of approximately $7.0 billion. Operationally…
10-K · February 13, 2025
Johnson & Johnson reported fiscal 2024 sales of $88,821 million (up from $85,159 million in 2023) with continuing-operations diluted EPS of $5.79. The company generated strong operating cash flow of $24,266 million…
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