Johnson & Johnson is holding its earnings outlook steady despite President Donald Trump moving decisively toward imposing tariffs on the pharmaceutical industry.
The administration’s investigation into drug imports announced Monday, widely seen as a first step toward imposing levies on the industry, could actually be beneficial, J&J Chief Financial Officer Joe Wolk said in an interview. The investigation is likely to show most medicines shipped to the U.S. are cheap generics, not the innovative therapies sold by J&J, he said.
“In some respects, it could very much be good news,” he said. “The last thing anybody wants is to deny a cancer patient the oncology therapeutic that will help them not only cope with the disease but conquer it.”
The specter of tariffs is likely to overshadow what was a positive quarter for J&J. The company’s adjusted earnings rose 2.2% to $2.77 per share, beating analysts’ average estimates. Revenue of $21.9 billion also came in ahead of Wall Street’s expectations.
The company expects full-year adjusted earnings between $10.50 and $10.70 per share, which includes a charge of 25 cents per share to reflect its nearly $15 billion recent acquisition of the biopolar depression drugmaker Intra-Cellular Therapies Inc.
J&J’s decision not to slash its forecast is “a welcome relief in the wake of recent stock market turmoil,” Leerink analyst David Risinger wrote in a note to clients. And the fact that J&J didn’t increase its guidance despite the strong quarter suggests the company is being cautious ahead of what could be a tumultuous year, Bloomberg Intelligence analysts John Murphy and Sam Fazeli wrote.
The 232 investigation didn’t come as a surprise, J&J Chief Executive Officer Joaquin Duato said on a conference call with analysts, and the company is still analyzing its potential effects.
“There is a reason why pharmaceutical tariffs are zero,” Duato said. “It’s because tariffs can create disruptions in the supply chain leading to shortages. If what you want is to build manufacturing capacity in the U.S., both in medtech and in pharmaceuticals, the most effective answer is not tariffs, but tax policy.”
J&J expects to record a $400 million tariff expense in 2025, which reflects already-announced levies and doesn’t predict the effects of the 232 investigation.
Shares of J&J were little changed as markets opened in New York. The stock had advanced 6.7% in 2025 as of Monday’s close.
Patents and lawsuits
J&J is fighting through a multibillion-dollar patent cliff as its second-biggest drug, the psoriasis treatment Stelara, is facing off-brand competition in the U.S. and Europe. The company is counting on newer medicines, including Darzalex, its top-selling treatment for blood cancer, and the autoimmune treatment Tremfya, to make up for the decline. The company also faces an uncertain future in the courtroom after a federal judge rejected its plan to settle thousands of talc-related lawsuits late last month.
Darzalex beat estimates on the quarter, bringing in $3.2 billion, and Tremfya exceeded expectations with $956 million in sales. The company’s medical devices contributed $8 billion in the quarter, falling short of projections.
Wall Street has been focused on any fallout from potential of tariffs imposed on the pharmaceutical industry, which Trump has accused of dangerously moving its manufacturing abroad and overcharging in the U.S. While drugs were exempted from the president’s initial list of tariffs, the administration has promised to impose levies on the field in the months to come.
