Johnson & Johnson Slips as Q4 Profit Misses Estimates
Strong sales from MedTech and Pharma divisions were overshadowed by acquisition-related costs, as investors digested mixed results and 2026 guidance.
Johnson & Johnson shares slipped in morning trading after the healthcare giant reported fourth-quarter earnings that fell short of Wall Street expectations, taking the shine off a robust sales performance driven by its core Pharmaceutical and MedTech businesses.
The company posted adjusted earnings of $2.46 per share, which was below analyst consensus estimates and included a specific charge related to a recent acquisition. However, quarterly revenue came in strong at $24.56 billion, comfortably beating forecasts of around $23.76 billion. The mixed results sent shares down approximately 1.8% as investors weighed the bottom-line miss against the company's optimistic forecast for 2026.
The primary driver of the earnings shortfall was an approximate $0.10 per share impact from costs associated with its $3.05 billion acquisition of Halda Therapeutics, a deal that closed in late December 2025. This acquisition is part of Johnson & Johnson's strategy to bolster its oncology portfolio with Halda's innovative cancer-fighting technology. While the charge obscured underlying profitability for the quarter, the company's operational performance showed considerable strength.
Johnson & Johnson’s top-line growth was powered by its two core segments. The Innovative Medicine division, its largest, saw sales rise, benefiting from continued demand for key treatments like the cancer drug Darzalex. According to a company announcement, full-year sales for Darzalex reached over $14 billion in 2025. The MedTech division also delivered a strong performance, reflecting a rebound in surgical procedures and growing demand for its medical devices.
This report is the latest since the company streamlined its operations to focus on pharmaceuticals and medical devices following the spinoff of its consumer health branch, Kenvue. The strategy aims to position Johnson & Johnson as a more focused, higher-growth enterprise.
Despite the immediate negative stock reaction, management provided an upbeat outlook for the year ahead. Johnson & Johnson issued 2026 guidance projecting adjusted earnings per share to grow by approximately 6.9% at the midpoint. Chief Financial Officer Jessica Moore stated on the earnings call that the company is "confident in our outlook for 2026, driven by the strength of our diverse portfolio and pipeline."
Analysts have maintained a cautiously optimistic stance on the healthcare bellwether, which holds a market capitalization of over $526 billion. The consensus rating among analysts remains a 'Moderate Buy', with an average price target hovering around $212 per share. The immediate market reaction appears focused on the earnings miss, but the strong underlying revenue and positive guidance provide a foundation for future performance.
Looking forward, investors will be closely monitoring the integration of Halda Therapeutics and the company's ability to maintain its sales momentum, particularly as some of its blockbuster drugs face increasing competition. As reported by Bloomberg, the company's ability to navigate pricing pressures will be a key factor in achieving its ambitious revenue goals. For now, the market is left to balance a noisy fourth quarter against a clear and confident strategic path forward.