Johnson & Johnson has given a strong outlook for the year ahead, beating Wall Street expectations on both sales and profit. This is despite the company warning of a financial hit running into hundreds of millions of dollars due to a new drug pricing deal with the US government.
Earlier this month, Johnson & Johnson agreed to lower prices on certain medicines sold in the US. In return, the company will receive exemptions from broad US tariffs. Several other big drugmakers have signed similar deals.
Lowering drug prices has become a key focus for President Donald Trump. The issue has gained urgency as voters head toward midterm elections in November and healthcare costs remain a major concern.
Speaking to Reuters, J&J Chief Financial Officer Joseph Wolk said the exact terms of the agreement cannot be shared. However, he confirmed that the impact on the company’s finances would be in the hundreds of millions of dollars.
Despite this setback, Wolk said it reflects well on the company’s execution that its 2026 forecast is still stronger than what analysts expected.
On Wednesday, Johnson & Johnson said it expects current year sales to come in between $100 billion and $101 billion. This is well above the Bloomberg consensus estimate of $98.88 billion.
The company also guided for full year profit of $11.43 to $11.63 per share. Analysts were expecting $11.45 per share.
Johnson & Johnson shares were slightly lower in premarket US trading. Over the past year, the stock has surged more than 47 percent.
The company also posted strong fourth quarter results. Sales rose 9.1 percent from a year earlier to $24.56 billion. This beat expectations of $24.15 billion.
Growth was supported by solid demand for medical technology equipment. Sales of Darzalex, its blood cancer drug, jumped 27 percent during the quarter.
Adjusted profit came in at $2.46 per share. Analysts had forecast $2.04.
This was achieved despite weaker sales of Stelara, a popular psoriasis treatment that is now facing increased competition from lower cost biosimilar drugs.
