Johnson & Johnson’s first quarter results reflected a steady performance, with the company surpassing Wall Street’s revenue and adjusted profit expectations. Management credited the diversified portfolio across innovative medicine and MedTech as key to navigating industry challenges, particularly the loss of market exclusivity for STELARA, a major pharmaceutical product. CEO Joaquin Duato highlighted, “No other healthcare company has delivered growth through the first year of Lucin exclusivity for a multibillion-dollar product...and yet, that is exactly what we are doing.” The company’s ability to offset biosimilar competition with double-digit growth from eleven key brands and strong operational execution was a central theme of the quarter.
Is now the time to buy JNJ? Find out in our full research report (it’s free).
Johnson & Johnson (JNJ) Q1 CY2025 Highlights:
- Revenue: $21.89 billion vs analyst estimates of $21.56 billion (2.4% year-on-year growth, 1.5% beat)
- The company slightly lifted its revenue guidance for the full year to $92 billion at the midpoint from $91.3 billion
- Management reiterated its full-year Adjusted EPS guidance of $10.60 at the midpoint
- Operating Margin: 28.3%, in line with the same quarter last year
- Organic Revenue rose 3.3% year on year (5.2% in the same quarter last year)
- Market Capitalization: $373.5 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Johnson & Johnson’s Q1 Earnings Call
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Larry Biegelsen (Wells Fargo) asked about the $400 million tariff impact and mitigation strategies. CFO Joe Wolk explained tariffs mostly affect MedTech exports to China and that price increases are limited due to contracts; mitigation includes increased U.S. manufacturing.
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Chris Schott (JPMorgan) pressed on margin pressures and gross margin trends. Wolk attributed the decline to product mix shifts (notably STELARA’s loss), Part D redesign, and currency headwinds, noting analysts had likely overestimated margin resilience.
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Asad Hader (Goldman Sachs) sought clarity on how quickly newer brands can offset STELARA erosion. Executive Vice President Jennifer Taubert stated that excluding STELARA, the portfolio grew over 12%, with eleven brands posting double-digit growth, and expects ongoing transition through the year.
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Joanne Wuensch (Citibank) questioned the orthopedic segment’s underperformance and recovery prospects. CEO Joaquin Duato outlined one-time impacts and competitive pressures, expressing confidence in new product launches and innovation driving improvement in the second half.
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Matt Miksic (Barclays) inquired about the outlook for immunology products Tremfya and Ichotrochindra. Taubert and R&D head John Reed highlighted strong demand for Tremfya in new indications and the upcoming launch of oral therapy Ichotrochindra as key growth drivers.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be monitoring (1) the market adoption and sales ramp of newly launched therapies like Tremfya in Crohn’s disease and Caplyta in neuroscience, (2) the pace of margin recovery as MedTech restructuring and new product launches unfold, and (3) ongoing cost pressures from tariffs and their mitigation through increased U.S. manufacturing. Progress on advancing late-stage pipeline assets and successful integration of recent acquisitions will also be important signposts.
Johnson & Johnson currently trades at $153.69, in line with $154.43 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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