Daily newsletter · Wed 14 Oct 2026
Johnson & Johnson beat on profit and fell 5.73% over medical devices
Johnson & Johnson fell 5.73% to US$248.61 on Tuesday. It earned an adjusted US$2.80 a share, ahead of the US$2.76 expected, and raised its full-year outlook.
So why did the shares fall? The medical technology division, which sells surgical tools, heart pumps and replacement joints, grew sales just 2.5% to US$8.64 billion. Investors had expected about US$8.74 billion.
Chief financial officer Joe Wolk pointed overseas. He blamed the Middle East conflict, austerity in Europe and pricing in China. Governments near the conflict, he said, are moving money from health budgets to defence.
The drugs business had a good quarter. Pharmaceutical sales rose 7.7% to US$16.8 billion, led by Tremfya, a treatment for psoriasis and bowel disease, whose sales grew 68%.
J&J also settled on a plan for its hips-and-knees business. It had been reported to be in talks to sell the unit to Apollo Global Management. Wolk now prefers spinning it off as a separate company, partly because buyers would use today's low medical-device valuations against J&J.
whether the slowdown is regional or lasting. Medical devices are about a third of J&J's sales, and a third of the business growing at 2.5% weighs on the whole company however well the drugs sell.
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