J&J(JNJ) - 2026 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2026, worldwide sales reached $24.1 billion, reflecting a 6.4% increase, despite a 540 basis point headwind from STELARA [16][17] - Net earnings for the quarter were $5.2 billion, with diluted earnings per share at $2.14, compared to $4.54 a year ago [16] - Adjusted net earnings were $6.6 billion, with adjusted diluted earnings per share at $2.70, representing a decrease of 1.4% and 2.5% respectively compared to Q1 2025 [16][22] Business Line Data and Key Metrics Changes - Innovative Medicine reported worldwide sales of $15.4 billion, increasing by 7.4%, with growth in the U.S. at 9.6% and 4.3% outside the U.S. [17] - MedTech sales were $8.6 billion, up 4.6%, with U.S. growth at 5.9% and 3.2% outside the U.S. [20] - In oncology, DARZALEX sales were $4 billion, with operational growth of 18%, while CARVYKTI achieved sales of approximately $600 million, growing by 57.4% [9][18] Market Data and Key Metrics Changes - U.S. sales growth was 8.3%, while international sales grew by 3.9% [16] - Acquisitions and divestitures positively impacted worldwide growth by 110 basis points, primarily from the Intra-Cellular acquisition [16][17] - The company is on track to meet its 2026 target of $100 billion in annual revenue for the first time [8] Company Strategy and Development Direction - The company aims for accelerated growth in 2026, focusing on high innovation areas and maintaining a strong portfolio and pipeline [7][8] - The strategy includes significant investments in U.S.-based manufacturing technology and R&D, with a target of $55 billion through early 2029 [27] - The company is confident in achieving double-digit growth by the end of the decade, driven by new product launches and a strong pipeline [25][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on commitments for 2026 and beyond, citing a strong portfolio and pipeline [15][35] - The company anticipates continued operational sales growth throughout the year, with a higher fourth quarter due to a 53rd week benefit [30] - Management highlighted the importance of new product launches, particularly ICOTYDE and INLEXZO, in driving future growth [31][32] Other Important Information - The company announced a 3.1% increase in its annual dividend rate to $5.36 per share, marking the 64th consecutive year of dividend growth [28] - The adjusted operational earnings per share guidance was increased to a range of $11.30-$11.50, representing 5.7% growth at the midpoint [30] Q&A Session Summary Question: Positioning of ICOTYDE in the market - Management highlighted ICOTYDE's differentiated label as the first and only targeted oral peptide, with strong early enthusiasm from physicians and patients [39][40] Question: Sentiment in the medical device space - Management acknowledged low sentiment but emphasized solid operational growth and confidence in end markets, despite some procedural softness early in the quarter [44][46] Question: Double-digit growth expectations - Management reiterated confidence in achieving double-digit growth by the end of the decade, driven by new product launches and a strong pipeline [52][56]