Johnson & Johnson (NYSE:JNJ) on Wednesday issued sales and profit guidance for the current year that came in ahead of Wall Street expectations, even as the healthcare group prepares for a financial impact of “hundreds of millions” of dollars tied to a recent U.S. drug pricing agreement.
Earlier this month, J&J agreed to cut prices on certain medicines for American patients in exchange for exemptions from broad U.S. tariffs, joining several other large pharmaceutical companies in similar deals. Lowering drug prices has been a key policy objective for U.S. President Donald Trump, with the issue gaining prominence ahead of the November midterm elections.
In comments to Reuters, J&J Chief Financial Officer Joseph Wolk said the company could not disclose full details of the agreement, but noted that the negative earnings impact would be in the “hundreds of millions of dollars.” Wolk added that it was a “credit” to the Johnson & Johnson team that the company’s 2026 outlook still exceeded analyst expectations despite the drag from the pricing deal.
For the year ahead, Johnson & Johnson said it expects sales of between $100 billion and $101 billion, comfortably above the Bloomberg consensus estimate of $98.88 billion. Full-year earnings are forecast at $11.43 to $11.63 per share, compared with market expectations of $11.45.
Shares in the company, which have risen more than 47% over the past 12 months, edged lower in U.S. premarket trading following the update.
Looking back at the most recent quarter, Johnson & Johnson reported fourth-quarter sales of $24.56 billion, up 9.1% from a year earlier and ahead of analysts’ forecasts of $24.15 billion. Growth was supported by strong demand for medical technology equipment and a 27% jump in sales of its Darzalex blood cancer treatment.
Adjusted earnings per share came in at $2.46, well above expectations of $2.04, despite weaker sales of the psoriasis drug Stelara, which has faced increasing competition from biosimilar alternatives.