Johnson & Johnson raises guidance as Q2 sales top $25.3 billion

Key Takeaways:

Q2 revenue of $25.31 billion beat consensus by $260 million
Tremfya sales surged 72.5% to $2 billion, offsetting Stelara erosion
Full-year sales guidance raised to $101.1 billion midpoint

Johnson & Johnson reported second-quarter revenue of $25.31 billion, up 6.6% from a year earlier and above the $25.05 billion consensus, as growth from its immunology and oncology portfolios offset patent losses on older drugs.

"The results reflect strong commercial execution across our Innovative Medicine and MedTech segments," Chief Financial Officer Joseph Wolk said in an interview. He noted that the company's pipeline of more than 20 novel therapies targeting regulatory filings by 2030 provides a clear growth trajectory.

Adjusted earnings came in at $2.90 per share, topping the $2.85 analyst estimate by 1.8%. The pharmaceutical unit generated $16.38 billion in quarterly sales, ahead of the $16.1 billion forecast, while MedTech contributed $8.93 billion, slightly trailing expectations.

The company raised its full-year sales forecast to about $101.1 billion at the midpoint, from $100.8 billion previously, and lifted its adjusted earnings per share outlook to $11.68 from $11.55. The guidance raise signals management expects demand for its newer products to sustain momentum through the second half.

Tremfya leads immunology growth as Stelara fades

Sales of Tremfya, a treatment for plaque psoriasis and inflammatory bowel disease, jumped 72.5% to $2 billion, beating the $1.74 billion consensus. The drug has become J&J's second-largest product as it fills the gap left by Stelara, whose revenue has collapsed after losing patent protection. Stelara sales fell 62% in the first quarter, and analysts expect a similar decline in the second quarter.

Blood cancer therapy Darzalex, J&J's top-selling drug, generated $4.2 billion in the quarter, roughly in line with analyst estimates. The company is also counting on Carvykti, a personalized cell therapy for multiple myeloma that grew 57% in the first quarter to $597 million, to expand its oncology footprint.

MedTech growth tempered by Abiomed slowdown

The medical technology unit posted $8.93 billion in sales, slightly below analyst estimates, as Abiomed heart pump sales fell 2% year over year after a 14% growth rate in the first quarter. Wolk attributed the decline to a United Kingdom study that raised questions about Impella pump use during high-risk coronary procedures.

"We have a big data set coming out probably in the first half of next year that should allay any fears," Wolk said. J&J has 28 platforms generating at least $1 billion in annual revenue, reducing its dependence on any single product.

AI and robotics drive next growth wave

Beyond the quarterly numbers, J&J is pushing into artificial intelligence-powered imaging and mapping for electrophysiology, a drug delivery system for bladder cancer, and a table-integrated robotic surgical system. The company has committed more than $55 billion to United States manufacturing and research through 2029, including $1 billion to expand its ACUVUE contact lens production in Jacksonville, Florida.

The guidance raise and pipeline momentum position J&J to sustain its roughly 24.5% year-to-date gain, which has more than doubled the S&P 500's return. Investors will watch the pace of Icotyde prescriptions — the first daily pill in the IL-23 inhibitor class, approved in March — as a key indicator of future revenue growth.

This article is for informational purposes only and does not constitute investment advice.