Johnson & Johnson (NYSE:JNJ) delivered third-quarter earnings and revenue ahead of market forecasts and unveiled plans to spin off its Orthopaedics division in a strategic move to sharpen its focus on higher-growth areas.
The company’s shares edged higher in premarket trading Tuesday following the announcement. J&J reported earnings per share of $2.80 for the third quarter, beating analyst expectations of $2.76. Revenue climbed 6.8% year over year to $23.99 billion, topping the consensus estimate of $23.76 billion.
The group reaffirmed its full-year 2025 earnings outlook, maintaining guidance for EPS between $10.80 and $10.90, roughly matching the consensus of $10.85. Adjusted operating EPS is expected in the $10.63 to $10.73 range.
Revenue guidance was slightly increased to a range of $93.5 billion to $93.9 billion, up from the previous projection of $93.2 billion to $93.6 billion.
J&J also revealed plans to spin off its Orthopaedics unit to streamline its portfolio and concentrate on faster-growing, higher-margin segments in Innovative Medicine and MedTech. The company said the move aims to optimize capital allocation and enhance long-term earnings quality.
“This transaction enables Johnson & Johnson to further strengthen its focus and investment toward higher-growth areas,” said CEO Joaquin Duato, noting the strategy aligns with the company’s goal to “meaningfully extend and improve patient lives.”
Duato added that the planned carve-out underscores J&J’s commitment to portfolio optimization and would allow the Orthopaedics division more flexibility to boost growth and profitability as an independent business.
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