# Johnson & Johnson (JNJ): Profit falls 96% on a talc legal charge, but sales rise 6% and the outlook is raised

> Johnson & Johnson, the American maker of prescription medicines and medical devices, reported third-quarter sales of $25.4 billion, up 5.9% from a…

- URL: https://centiview.com/post/johnson-johnson-jnj-profit-falls-96-on-talc-charge-but-sales-rise-6-and-outlook-is-raised
- Published: 2026-10-15T00:15:00.000Z
- Sectors: Healthcare
- Region: US
- Ticker: JNJ
- Sentiment (opinion, not a recommendation): neutral
- Publisher: Centiview (Persie Ltd, London)
- General information only, not financial advice

Johnson & Johnson, the American maker of prescription medicines and medical devices, reported third-quarter sales of $25.4 billion, up 5.9% from a year earlier. Its reported profit fell 96% to $210 million because of a one-time charge for a proposed settlement of talc lawsuits, while profit excluding one-off items fell 6.8%. The company raised its forecast for the full year.

## What happened

On Tuesday 13 October 2026, Johnson & Johnson published results for the third quarter, the three months to 30 September, in a filing with the US Securities and Exchange Commission. Worldwide sales were $25,399 million, against $23,993 million a year earlier. The headline profit, called net earnings, was only $210 million, against $5,152 million a year earlier. The release says the figure reflects a one-time special charge for the proposed resolution of ovarian talc litigation, meaning the lawsuits from people who say its talc products caused cancer. It also reflects costs linked to buying the biotech company Firefly Bio and to a research collaboration with Sail Biomedicines.

The legal charge is explained in more detail by independent outlets than by the company's release, which gives no dollar amount. Stock Titan and Pomegra both report a charge of about $5.5 billion before tax, linked to a proposal announced on 27 July 2026 to resolve about 76,000 remaining ovarian talc claims. Stock Titan reports that the offer needs at least 95% of those claims to take part, that the first payment would be no more than $3 billion and fall due in 2027, and that no further payments would come before 2028. The release itself does not give these terms, and we have not seen a confirmed statement on how many claimants have agreed.

## The numbers, explained

Sales are the money from selling products before any costs. Our working: $25,399M less $23,993M is a rise of $1,406M, or 5.9%. In the United States sales were $14,959M against $13,708M, up 9.1%; outside the US they were $10,440M against $10,285M, up 1.5%. By division, Innovative Medicine, the prescription drugs business, grew from $15,563M to $16,757M (up 7.7%), and MedTech, the surgical, heart and eye-care devices business, grew from $8,430M to $8,642M (up 2.5%). The two divisions add up to the $25,399M total. The release says the older arthritis and bowel-disease drug Stelara, which now faces cheaper copies, held back overall growth by about 6.9 percentage points.

Two profit measures matter. Under US accounting rules (GAAP), net earnings fell 95.9% ($210M against $5,152M) and diluted earnings per share, the profit attributable to each share including shares that could be created from awards, fell from $2.12 to $0.09, or 95.8%. The adjusted figures leave out one-off items and the cost of writing down acquired intangible assets, so they show the underlying business more clearly, but they are the company's own choice of what to exclude. Adjusted net earnings were $6,339M against $6,801M, down 6.8%, and adjusted earnings per share were $2.59 against $2.80, down 7.5%. By our working, adjusted profit was 25.0% of sales ($6,339M divided by $25,399M), against 28.3% a year earlier ($6,801M divided by $23,993M). Analysts, per Pomegra, had expected about $25.3 billion of sales and $2.54 adjusted earnings per share; those are estimates, not reported results.

## Why it matters

Johnson & Johnson makes most of its money by selling patented prescription medicines to hospitals and pharmacies, and by selling devices that surgeons and eye-care professionals use. Patents give a company the sole right to sell a drug for a period, so when they end, as with Stelara, sales drop quickly and new products must fill the gap. The release names Tremfya, Darzalex, Carvykti and Tecvayli, treatments for skin and bowel conditions and for a blood cancer called multiple myeloma, among the products that grew. It gives no dollar figure for any single product, so we do not state any. The company also reported that a combination of Tecvayli and Talvey cut the risk of the cancer progressing or the patient dying by 89% in earlier-line patients in a Phase 3 trial, a large late-stage study; that is the company's reported result, not our assessment.

The legal charge matters because it turns a long-running uncertainty into a number. Earlier attempts to settle talc claims through bankruptcy court did not succeed, and the new proposal depends on enough claimants accepting. For readers outside the company, the key point is the gap between the two profit measures: the underlying business still earned $6.3 billion in the quarter, while the reported figure was close to nil because the cost of the legal deal was booked all at once even though most cash is not due until 2027 or later. Whether that makes the company safer or merely changes the timing of the cost is a matter of opinion, so we draw no conclusion. We have not compared other drugmakers' results, so we make no statement about the wider sector.

## What to watch next

The company raised its 2026 outlook. It now expects reported sales of $101.0 billion to $101.4 billion and adjusted earnings per share of $11.05 to $11.15, a midpoint of $11.10. In its July update the adjusted range was $10.96 to $11.11, midpoint $11.04, so the midpoint rose $0.06. Stock Titan notes the new midpoint is still $0.58 below the midpoint the company gave on 15 July. These are the company's own forecasts, not facts. Next to follow: whether the 95% participation threshold for the talc proposal is reached, the first payment of up to $3 billion due in 2027, the regulatory review of Rybrevant Faspro for advanced head and neck cancer, which the release says the US Food and Drug Administration granted priority review, and the next quarterly results. We did not find a confirmed date for those, so check the company's investor relations site.

- Key terms in plain words
- Net earnings: profit after all costs, tax and one-off items.
- Adjusted earnings: profit the company reports after leaving out one-off items and the cost of writing down acquired intangible assets.
- Talc litigation: lawsuits from people who say the company's talc products caused cancer.
- Patent: the exclusive right to sell a new medicine for a set period.

> **Why it matters** One of the world's largest healthcare companies grew sales and raised its forecast, but its reported profit almost vanished because of a one-time legal charge. The gap between reported and underlying profit is the story.

> **What we verified** From Johnson & Johnson's Form 8-K earnings release dated 13 Oct 2026 (primary): sales $25,399M vs $23,993M; US $14,959M vs $13,708M; international $10,440M vs $10,285M; Innovative Medicine $16,757M vs $15,563M; MedTech $8,642M vs $8,430M; net earnings $210M vs $5,152M; diluted EPS $0.09 vs $2.12; adjusted net earnings $6,339M vs $6,801M; adjusted EPS $2.59 vs $2.80; 2026 guidance. Stock Titan and Pomegra confirm sales, EPS, adjusted EPS and the roughly $5.5bn pre-tax talc charge and settlement terms (the release gives no amount). Pomegra gives the consensus figures (estimates). All percentages and margins were recomputed by us. We make no beat or miss claim, as providers' estimates differ.

### Sources
- [Johnson & Johnson Form 8-K, Exhibit 99.1: Third Quarter 2026 Results (SEC)](https://www.sec.gov/Archives/edgar/data/0000200406/000020040626000189/a2026q3exhibit991.htm)
- [Stock Titan: J&J Earnings: Baby Powder Lawsuit Offer Nearly Erased Profit](https://www.stocktitan.net/articles/johnson-johnson-q3-2026-earnings-talc-settlement)
- [Pomegra: J&J Q3 2026: Talc Charge Cuts Profit 96% as Outlook Rises](https://pomegra.io/news/jj-q3-2026-talc-charge-cuts-profit-96-as-outlook-rises)