Bullish indicating open at $55-$60, IPO prices at $37
Johnson & Johnson (NYSE:JNJ) reported second-quarter 2025 results on July 16, showcasing 5.8% sales growth to $23.7 billion and raising its full-year guidance despite significant headwinds from Stelara biosimilar competition. The healthcare giant’s shares rose 1.24% in premarket trading to $157.10.
Quarterly Performance Highlights
J&J delivered 4.6% operational sales growth in Q2, with its Innovative Medicine segment achieving 3.8% operational growth despite an approximately 1,170 basis point impact from Stelara. The MedTech division demonstrated strong momentum with 6.1% operational growth.
"Our diversified business and portfolio positioning have enabled us to deliver strong results this quarter," said Joaquin Duato, Chairman and CEO of Johnson & Johnson, according to the presentation materials.
The company reported GAAP earnings per share of $2.29, an 18.7% increase from the prior year, while adjusted EPS decreased slightly by 1.8% to $2.77, with Stelara impacting results by approximately 710 basis points.
As shown in the following quarterly earnings summary:
U.S. sales led regional performance with 7.8% growth to $13.5 billion, while international sales increased 3.2% reported (0.6% operationally) to $10.2 billion. European markets showed 3.3% reported growth but declined 1.9% operationally.
The regional sales breakdown illustrates the company’s global performance:
Detailed Financial Analysis
Johnson & Johnson’s Q2 financial results demonstrate the company’s ability to grow despite challenges in key product lines. Total (EPA:TTEF) sales reached $23.7 billion, up from $22.4 billion in Q2 2024, while GAAP earnings increased 18.2% to $5.5 billion.
The financial highlights show the contrast between strong GAAP performance and the modest decline in adjusted metrics:
The Innovative Medicine segment, which accounts for approximately 64% of total sales, reached $15.2 billion in quarterly revenue for the first time. This growth was primarily driven by Oncology (+22.3% operationally to $6.3 billion) and Neuroscience (+14.4% operationally to $2.1 billion), which helped offset the 16.0% operational decline in Immunology due to Stelara biosimilar competition.
The MedTech division delivered $8.5 billion in sales, with particularly strong results in the Cardiovascular segment, which grew 22.3% operationally to $2.3 billion. This performance was partially offset by a 1.6% operational decline in Orthopaedics.
Strategic Initiatives & Pipeline
Johnson & Johnson continues to invest significantly in research and development, with $3.5 billion allocated to R&D in Q2 2025. The company also returned $3.1 billion to shareholders through dividends and deployed approximately $15 billion in strategic opportunities.
The company’s capital allocation strategy balances investments in growth with shareholder returns:
J&J’s innovation pipeline remains robust, with numerous anticipated milestones for 2025 across both divisions. In Innovative Medicine, the company expects potential approvals for products like TAR-200 for bladder cancer, RYBREVANT Sub-Q for non-small cell lung cancer, and TREMFYA for ulcerative colitis. The MedTech division anticipates launches including the VOLT Plating System, OTTAVA robotic surgical system, and advancements in cardiovascular technology.
The following slide outlines key anticipated milestones for 2025:
Forward-Looking Statements
Based on strong first-half performance, Johnson & Johnson raised its full-year 2025 guidance. The company now expects adjusted operational sales growth of 3.2% to 3.7%, up from the previous 2.0% to 3.0% range. Adjusted operational EPS is projected at $10.63 to $10.73, compared to the earlier guidance of $10.50 to $10.70.
The updated guidance reflects management’s confidence in accelerating growth during the second half of 2025:
The company anticipates higher operational sales growth in the second half of 2025 compared to the first half, driven by newly launched products in Innovative Medicine and acceleration of new product launches in MedTech. However, management acknowledged that accelerated Stelara biosimilar competition will continue to impact results.
"We expect stronger growth in the second half of the year as we continue to execute on our strategic priorities and bring innovative solutions to patients and healthcare providers worldwide," noted Joseph J. Wolk, Executive VP and CFO, according to presentation materials.
The improved guidance suggests Johnson & Johnson is successfully navigating the Stelara patent cliff while leveraging its diversified portfolio and robust pipeline to maintain growth momentum through 2025 and beyond.
Full presentation:
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