Loading blog posts...
October 23, 2025 • 4 min read
Healthcare titan Johnson & Johnson (JNJ) recently released its financial results for the third quarter of 2025, offering a detailed look into the performance of its massive Innovative Medicine and MedTech segments. Let's dive into the numbers from its latest 10-Q filing to see what's driving the company's growth and where the challenges lie.
For the third quarter ended September 28, 2025, Johnson & Johnson reported total sales of $24.0 billion, a healthy 6.8% increase from the same period last year. More strikingly, net earnings soared to $5.2 billion, or $2.12 per diluted share, a significant jump from last year's $2.7 billion, or $1.11 per share.
To better understand how revenue flows through the company's operations to become profit, the following chart visualizes the income statement for the first nine months of the year.
Please log in to view diagrams.
Johnson & Johnson's business is split into two powerhouses: Innovative Medicine and MedTech. Both segments posted identical worldwide growth of 6.8% for the quarter, but the stories behind that growth are quite different.
Innovative Medicine, the company's pharmaceutical arm and largest segment, generated $15.6 billion in sales. The star of the show was the Oncology division, which surged by 21.3% to $6.5 billion. This growth was fueled by blockbuster drugs like DARZALEX (for multiple myeloma), which brought in $3.7 billion (up 21.7%), and the continued impressive performance of CARVYKTI, which saw sales jump 83.5% to $524 million.
However, the Immunology division faced headwinds, with sales declining 9.8% to $4.2 billion. This was almost entirely due to the anticipated sales drop for STELARA, a treatment for Crohn's disease and psoriasis. Its sales fell 41.3% to $1.6 billion as it faces increasing competition from biosimilars—essentially, generic versions of biologic drugs. This highlights a key challenge for any pharmaceutical giant: managing patent cliffs. Fortunately, strong growth from TREMFYA, another immunology drug, helped offset some of the decline.
The MedTech segment, which covers everything from surgical tools to contact lenses, also had a strong quarter with $8.4 billion in sales. The Cardiovascular franchise was a major contributor, growing 12.6% to $2.2 billion, bolstered by the recent acquisition of Shockwave Medical. The company also continues to evaluate its portfolio, noting in its filing the planned separation of its Orthopaedics business, a strategic move worth watching.
The dramatic increase in net earnings from $2.7 billion to $5.2 billion year-over-year wasn't just about sales growth. A closer look reveals two key factors related to expenses in the prior year's quarter.
First, "Other (income) expense, net" flipped from a $1.8 billion expense in Q3 2024 to a $478 million income in Q3 2025. The filing explains that the 2024 figure included approximately $2.0 billion in charges for talc-related litigation matters.
Second, Research & Development (R&D) expenses were significantly lower this quarter, at $3.7 billion compared to nearly $5.0 billion last year. This is largely because Q3 2024 included a one-time $1.25 billion expense for a licensing deal. The absence of these major one-off costs from the prior year made this quarter's profitability look exceptionally strong.
Johnson & Johnson's Q3 results paint a picture of a company successfully navigating a complex healthcare landscape. Strong performance in Oncology and strategic MedTech acquisitions are driving top-line growth, effectively counterbalancing the expected decline of a blockbuster drug like STELARA. The company is using its substantial cash flow—$17.2 billion from operations over nine months—to invest in acquisitions ($14.5 billion) while also rewarding shareholders with dividends ($9.3 billion) and buybacks ($4.0 billion).
Looking ahead, the key will be to see if JNJ can continue this momentum, successfully integrate its new businesses, and manage the transition as older drugs lose patent protection and newer ones take their place.
Last updated: October 23, 2025