Johnson & Johnson maintains 2025 guidance after beating Q1 expectations
Overview
Johnson & Johnson delivered strong Q1 2025 results, led by double-digit earnings growth and strategic momentum across its Innovative Medicine and MedTech segments. The company saw particularly robust growth in oncology and cardiovascular therapies, while operating margins expanded significantly due to lower litigation expenses and efficiency initiatives.
“We remain focused on delivering transformative innovation while optimizing our portfolio for long-term value creation”, said CEO Joaquin Duato.
Q1 2025 vs. Q1 2024:
- Sales recorded a value of $21.89bn (+2.4% YoY and +4.2% operational), with growing revenues in each sector of activity.
- Innovative Medicine revenue increased to $13.87bn (+2.3% YoY and +4.2% operational).
- Oncology revenue was $5.68bn (+17.9% YoY), driven by strong performance from DARZALEX (+20.3% YoY), CARVYKTI, and RYBREVANT.
- Immunology revenue was $3.71bn (-12.7% YoY), impacted by loss of exclusivity and biosimilar competition for STELARA.
- Neuroscience revenue also declined to $1.65bn (-8.6% YoY), with SPRAVATO offsetting declines in other therapies.
- Cardiovascular & Other revenues recorded a value of $1.01bn (+22% YoY), led by XARELTO growth.
- MedTech revenue grow to $8.02bn (+2.5% YoY and +4.1% operational).
- Cardiovascular revenue rose to $2.10bn (+16.4% YoY), led by ABIOMED and recent Shockwave acquisition.
- Orthopaedics revenue decreased to $2.24bn (-4.2% YoY), due to market exits and product line rationalization.
- Surgery revenue was $2.40bn (-0.8% YoY), stable with growth in advanced energy.
- Vision revenue increased slightly to $1.28bn (+1.7% YoY), supported by growth in contact lenses.
- Innovative Medicine revenue increased to $13.87bn (+2.3% YoY and +4.2% operational).
- Net earnings (GAAP) have more than doubled, reaching a value of $11.0bn (+238% YoY), while adjusted net earnings (non-GAAP) recorded a value of $6.71bn (+1.9% YoY).
- Diluted EPS also increased to $4.54 (compared to $1.34 in Q1 2024), while adjusted EPS recorded a value of $2.77 (compared to $2.71 in Q1 2024).
- Gross profit margin was 66.4% (vs. 69.6% in Q1 2024), impacted by product mix and amortization.
- R&D spending were $3.23bn (-8.9% YoY), reflecting prioritization of pipeline and recent program exits in infectious diseases.
- Free cash flow recorded a negative value of -$3.4bn (compared to $2.85bn in Q1 2024).
Johnson & Johnson reaffirmed its full-year 2025 guidance, projecting sales between $91.6bn and $92.4bn, representing a year-over-year increase of 2.0% to 3.0% on a reported basis, with a midpoint of $92.0bn. Adjusted earnings per share are expected to range from $10.50 to $10.70, reflecting anticipated growth of 5.2% to 7.2%, with a midpoint of $10.60. The company anticipates continued momentum in oncology, stabilization in its immunology portfolio, and a recovery in MedTech, while remaining cautious amid ongoing macroeconomic uncertainty and foreign exchange volatility.
As for the stock price of JNJ shares, it remains below the 50-day moving average for now, but close to it, this after the reporting of the results did not bring such significant movements among investors, the price remaining relatively constant, despite the quarterly results that were above the expectations of Wall Street analysts. However, since the beginning of this year, the stock price of JNJ has appreciated by approximately +8% so far, and a possible reversal of the downward trend since the beginning of April could be seen soon.
Author: Ionuț-Adrian Lazar
