Home / Business and Economy / JNJ Q3 Earnings Plummet 95.9%, But Dividend Holds Strong
JNJ Q3 Earnings Plummet 95.9%, But Dividend Holds Strong
21 Oct
Summary
- Q3 GAAP net earnings dropped 95.9% due to a one-time talc litigation charge.
- Adjusted EPS declined 7.5%, with future impacts expected from new acquisitions.
- Sales increased 5.9% to $25.4 billion, driven by oncology and TREMFYA growth.
Johnson & Johnson's third-quarter GAAP net earnings experienced a sharp 95.9% decline, falling to $210 million from the previous year. This significant decrease was largely attributed to a one-time special charge related to a proposed talc litigation resolution, with additional costs from the Firefly Bio acquisition and the SAIL Biomedicines collaboration also contributing. These factors caused GAAP EPS to drop to 9 cents from $2.12.
However, adjusted EPS, which excludes such one-time events, was reported at $2.59, a more modest 7.5% decrease from $2.80 in the prior year. Management anticipates that the Firefly and SAIL deals will reduce 2026 adjusted EPS by $0.64 per share. Amidst these adjustments, total sales for the quarter grew by 5.9% to $25.4 billion, driven by a robust 17% increase in oncology and a 68.2% surge in TREMFYA sales, which helped offset a 54% decline in STELARA due to biosimilar competition.
On the same day as the earnings report, Johnson & Johnson raised its full-year adjusted EPS guidance midpoint to $11.10 from $11.04. This upward revision suggests management's confidence in the company's overall performance for the year. The company also maintained its quarterly dividend at $1.34 per share, marking the 64th consecutive annual increase, reinforcing its status as a Dividend King. Free cash flow for the first nine months reached approximately $15.1 billion, supporting the dividend payments, which represent about 48% of the adjusted EPS guidance midpoint.
