Johnson & Johnson stock falls despite strong earnings as investors focus on medtech unit
Johnson & Johnson shares dropped over 5% following its third-quarter earnings report despite beating forecasts with earnings of $2.59 per share and raising its 2026 guidance. Total quarterly sales rose 5.9% to $25.4 billion, driven by pharmaceutical growth. However, the selloff occurred because MedTech sales grew just 2.5% to $8.64 billion, missing expectations and overshadowing the positive pharmaceutical results. Investors weighed the valuation against growth risks, focusing heavily on the medical technology underperformance.
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- ✓ Johnson & Johnson shares dropped more than 5% following its third-quarter earnings report.
- ✓ Third-quarter earnings beat forecasts at $2.59 per share and the company raised its 2026 guidance.
- ✓ Quarterly sales rose 5.9% to $25.4 billion.
- ✓ MedTech sales grew just 2.5% to $8.64 billion, missing estimates.
What changed
Johnson & Johnson is leaning toward spinning out its hips-and-knees orthopedics business as medtech sales disappoint.
Live updates
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Johnson & Johnson Stock Falls 5% on Weak MedTech Sales
Johnson & Johnson shares dropped over 5% following its third-quarter earnings report despite beating forecasts with earnings of $2.59 per share and raising its 2026 guidance. Total quarterly sales rose 5.9% to $25.4 billion, driven by pharmaceutical growth. However, the selloff occurred because MedTech sales grew just 2.5% to $8.64 billion, missing expectations and overshadowing the positive pharmaceutical results. Investors weighed the valuation against growth risks, focusing heavily on the medical technology underperformance.
Why it matters
The stock decline highlights how weakness in the medical technology unit can outweigh strength in the pharmaceutical division for healthcare stocks. The quarter's results also faced pressure from lower adjusted earnings and litigation-related charges. Market attention has shifted toward whether a potential spinoff of the hips-and-knees business could address the medtech problems.
What is confirmed
- Johnson & Johnson shares dropped more than 5% following its third-quarter earnings report.
- Third-quarter earnings beat forecasts at $2.59 per share and the company raised its 2026 guidance.
- Quarterly sales rose 5.9% to $25.4 billion.
- MedTech sales grew just 2.5% to $8.64 billion, missing estimates.
Still unconfirmed
- Johnson & Johnson is leaning toward spinning out its hips-and-knees orthopedics business.
What to watch next
- Official corporate confirmation or announcements regarding a spinoff of the orthopedics or hips-and-knees business.
- Future quarterly medical device sales figures to determine if the medtech weakness is temporary.
confidence 100%Sources used for this update (23)
- finance.yahoo.com — Yahoo Finance - Stock Market Live, Quotes, Business & Finance News
- Yahoo Finance — Johnson & Johnson stock falls despite strong earnings as investors focus on medtech unit
- Reuters — J&J posts weak medical device sales, shares fall
- Barron's — Johnson &Johnson Stock Earnings: Can a Spinoff Fix Its Medtech Problem
- WSJ — J&J Is Leaning Toward Spinning Out Its Hips-And-Knees Business
- Johnson & Johnson — Johnson and Johnson Earnings Report | 2026 Q3 Infographic
- Bloomberg.com — J&J Leans Toward Ortho Spinoff as Medtech Sales Disappoint
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- www.drugwatch.com — Johnson & Johnson – Products, Recalls, Lawsuits & Scandals
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