Johnson & Johnson Reports Q3 Revenue of $25.4 Billion, Net Earnings Decline Due to Litigation Charge

Johnson & Johnson reported its financial results for the fiscal third quarter and nine months ended September 27, 2026, revealing a total revenue of $25.4 billion for the third quarter, a 5.9% increase from $24.0 billion in the same period last year. For the nine-month period, the company achieved sales of $74.8 billion, up 7.4% from $69.6 billion in the prior year. The net earnings for the third quarter were $210 million, or $0.09 per share, a significant decline from $5.2 billion, or $2.14 per share, in the same quarter of 2025. The nine-month net earnings also fell to $10.98 billion, or $4.56 per share, compared to $21.69 billion, or $9.01 per share, in the previous year.

The company's financial performance was notably impacted by a $5.5 billion charge related to the proposed resolution of talc ovarian litigation, which significantly affected both the third quarter and nine-month earnings. Additionally, the fiscal nine months of 2025 included a reversal of approximately $7.0 billion related to the talc reserve, which had a favorable impact on that period's earnings. The gross profit margin for the third quarter was 68.1%, down from 69.6% a year earlier, while the cost of products sold increased as a percentage of sales, primarily due to an unfavorable product mix and increased intangible asset amortization.

Strategically, Johnson & Johnson has been active in acquisitions and restructuring efforts. The company completed the acquisition of Firefly Bio, Inc. for approximately $1.0 billion, which resulted in a charge of about $1.0 billion for acquired in-process research and development. The company also initiated a supply chain restructuring program aimed at optimizing operations within its Innovative Medicine segment, with total project costs expected to reach between $0.7 billion and $0.8 billion by the end of 2029. Furthermore, the company announced its intention to separate its Orthopaedics business, with the separation expected to be completed by mid-2027.

Operationally, Johnson & Johnson's Innovative Medicine segment reported sales of $16.8 billion for the third quarter, an increase of 7.7% year-over-year, while the MedTech segment achieved sales of $8.6 billion, a 2.5% increase. The U.S. market contributed significantly to growth, with sales increasing by 9.1% in the third quarter. However, the company faced challenges from biosimilar competition, particularly affecting sales of STELARA, which saw a decline of 54.4% in the third quarter. The company also reported a total of 2,407,310,266 shares of common stock outstanding as of October 15, 2026.

Looking ahead, Johnson & Johnson anticipates continued challenges from pricing pressures and competition in the healthcare market, particularly from biosimilars. The company remains focused on its strategic initiatives, including the planned separation of its Orthopaedics business and ongoing investments in research and development to drive future growth. The company expects to maintain its dividend payments, having declared a cash dividend of $1.34 per share for the upcoming quarter.