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Multinational healthcare company Johnson & Johnson (NYSE:JNJ) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 2.4% year on year to $21.89 billion. The company’s full-year revenue guidance of $92 billion at the midpoint came in 1.8% above analysts’ estimates. Its non-GAAP profit of $2.77 per share was 7.3% above analysts’ consensus estimates.

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Johnson & Johnson (JNJ) Q1 CY2025 Highlights:

• Revenue: $21.89 billion vs analyst estimates of $21.56 billion (2.4% year-on-year growth, 1.5% beat)

• Adjusted EPS: $2.77 vs analyst estimates of $2.58 (7.3% beat)

• Adjusted EBITDA: $9.16 billion vs analyst estimates of $8.39 billion (41.8% margin, 9.2% beat)

• The company slightly lifted its revenue guidance for the full year to $92 billion at the midpoint from $91.3 billion

• Management reiterated its full-year Adjusted EPS guidance of $10.60 at the midpoint

• Operating Margin: 28.3%, in line with the same quarter last year

• Free Cash Flow Margin: 43.2%, up from 13.3% in the same quarter last year

• Organic Revenue rose 3.3% year on year (5.2% in the same quarter last year)

• Market Capitalization: $380.2 billion

Johnson & Johnson’s latest quarter was shaped by ongoing growth in its innovative medicine and MedTech segments, as highlighted on the company’s earnings call. CEO Joaquin Duato cited 4.2% operational sales growth in innovative medicine, despite the negative impact from biosimilar competition for STELARA, and emphasized the company’s strong product launches and portfolio diversification. MedTech’s growth was supported by contributions from recent acquisitions and new product introductions, offsetting short-term headwinds in orthopedics and procedure volumes.

Looking ahead, management identified 2025 as a catalyst year, focusing on expanding key brands, advancing the pipeline, and executing on recently closed acquisitions. The company reaffirmed its full-year adjusted earnings guidance, while CFO Joe Wolk said the updated revenue outlook incorporates the addition of Caplyta from the IntraCellular acquisition. Management flagged the importance of mitigating new tariffs, navigating the loss of exclusivity for major products, and sustaining growth from its expanding medicine pipeline.

Key Insights from Management’s Remarks

Johnson & Johnson’s management attributed the quarter’s outperformance to both resilience in innovative medicine and robust execution in MedTech. Their remarks underscored the effects of biosimilar competition, new product launches, and strategic investments:

• STELARA biosimilar headwinds managed: Despite anticipated declines from biosimilar competition and U.S. Medicare Part D redesign, management emphasized that operational sales growth in innovative medicine was driven by double-digit expansion in eleven core brands, with Tremfya and DARZALEX noted for strong demand.

• Key launches in immunology and oncology: Tremfya’s new indications in inflammatory bowel disease and Crohn’s disease accelerated growth. Meanwhile, expanded European approval and new data for DARZALEX and riboflavin plus LASCRUZ in oncology highlighted the pipeline’s contribution to sales.

• MedTech growth from acquisitions and new products: The acquisitions of Abiomed and Shockwave were cited as meeting expectations and broadening the MedTech portfolio. Newly launched devices, such as the Javelin Peripheral IVL catheter and expanded robotic surgery trials, contributed to segment growth.

• Operational and margin pressures addressed: Management discussed cost pressures from product mix, tariffs, and acquisition-related expenses, but pointed to spending discipline and a restructuring program in surgery as measures to improve profitability by 2027.

• Capital allocation and investment priorities: The company reiterated its commitment to R&D, announcing plans to invest over $55 billion in U.S. manufacturing and technology over four years, alongside a dividend increase for the sixty-third consecutive year.