Johnson & Johnson posted second-quarter results that topped analyst expectations, reflecting robust demand for key medicines even as older products and certain medical devices faced headwinds.
The conglomerate disclosed quarterly revenue of $25.31 billion, a 6.6% increase versus the year-ago period and above the LSEG analyst consensus of about $25.05 billion. Adjusted earnings per share were $2.90, up 4.7% from a year earlier and slightly ahead of the $2.85 analyst estimate.
Guidance lifted
Following the quarter, the company nudged up its full-year outlook. At the midpoint, J&J now anticipates roughly $101.1 billion in sales, up from a prior midpoint of $100.8 billion. Adjusted earnings per share guidance was increased to $11.68 at the midpoint from $11.55 previously.
Pharmaceuticals: the growth engine
The pharmaceutical segment generated $16.38 billion in revenue for the quarter, ahead of the $16.1 billion analysts had forecast. Within the unit, sales of Tremfya, a therapy for psoriasis and inflammatory bowel disease, grew sharply - rising 72.5% year over year to $2.0 billion versus LSEG expectations of $1.74 billion. Tremfya's growth is noted in the company results as an increasingly important source of revenue as J&J seeks to offset declines tied to Stelara following its loss of patent protection.
Sales for Darzalex, a treatment for blood cancers, totaled $4.2 billion in the quarter, in line with analyst projections.
Medical technology: mixed results
Revenue at the medical technology unit was $8.93 billion for the quarter, slightly below analyst estimates. Within that segment, the Abiomed heart pump franchise - acquired by J&J in 2022 - experienced a year-over-year sales decline of 2% during the quarter, contrasting with 14% growth reported in the first quarter.
Johnson & Johnson's chief financial officer, Joseph Wolk, attributed the softer Abiomed performance in part to the publication of a U.K. study that raised questions about the use of Impella pumps in certain high-risk coronary procedures. Wolk said he expects the franchise to resume growth as additional data become available, noting: "We have a big data set coming out probably in the first half of next year that should allay any fears." He added that the company is not reliant on a single asset, saying: "When you have 28 platforms that generate at least $1 billion in revenue on an annual basis, we’re not dependent on one asset."
Takeaway
The quarter highlighted the company’s pharmaceutical portfolio as the primary driver of outperformance, with Tremfya and Darzalex delivering notable gains. At the same time, near-term pressure in parts of the medical technology business, notably the Abiomed pump franchise, moderated overall unit results. J&J’s raised full-year sales and adjusted EPS outlooks reflect management’s confidence in the company’s revenue mix despite these pockets of softness.