Johnson & Johnson (JNJ) sold $25.4 billion of drugs and devices last quarter, up 5.9%. It earned nine cents a share. A year earlier it earned $2.12. The difference isn't a bad business. It's a one-time charge for the proposed settlement of the lawsuits over its talc baby powder and ovarian cancer. Wednesday's Journal has the quarter, and the stock fell 5.7% on it.
Here are the two sets of numbers, because a J&J holder has to learn to read both. Reported profit fell to $210 million from $5.15 billion. Take out the one-time items and the company earned $2.59 a share. Analysts had penciled in $2.52. Both numbers are true. The talc charge is real money. J&J committed $5.5 billion in July to resolve those suits. It's also money the company already told you about, so the adjusted line is the one that says how the business ran. A deal for Firefly Bio and a partnership with Sail Biomedicines added special charges too.
The business ran unevenly. Prescription drugs did $16.76 billion, up 7.7%, and beat estimates. Medical devices did $8.64 billion, up 2.5%, and missed. “Med tech needs to improve,” CFO Joseph Wolk said. J&J raised its full-year adjusted earnings range to $11.05 to $11.15 from $10.96 to $11.11, and nudged its sales midpoint to $101.2 billion. It's on track to pass $100 billion in yearly sales.
Hips and knees, out the door
The news on the call was about DePuy Synthes, the orthopedics unit that sells hip and knee replacements and bone-repair devices. J&J said in October 2025 it planned to separate it. It talked with Apollo Global Management about a roughly $20 billion sale, the Journal has reported. Wolk now says the best path is to “spin it straight out.” He added that J&J isn't cash-strapped and doesn't “have to chase a bad deal to make it work.” The stock closed Tuesday at $248.61, down $15.12. The NYSE Arca pharma index fell 2.21% the same day, so part of the drop was the sector.
Our read
This is Investments/Risk · IN04. JNJ is held at weight in 25 books; nothing added, nothing trimmed on a day like this. Here's the judgment. A company that raises guidance in the same quarter it books a $5.5 billion legal charge is telling you something. The charge is a one-time cost, and the drugs are still growing. The device miss is the thing to watch. Two and a half percent growth is the number Wolk himself said he wasn't satisfied with. The spinout, if it comes, would hand holders a second stock they never chose. The story doesn't say how it'd be structured or taxed, so we won't either.
Here's where it touches your own account. Find out how you hold J&J. If it's a direct position, a spinout usually lands a new ticker in your account and splits your cost basis between the two. Decide now whether you'd keep an orthopedics company on its own. If you hold it through a dividend fund, which many retirees do, the fund makes that call for you, and it's worth knowing the rule it uses. The check this week is one line on your statement and one read of the fund's fact sheet. The drop was 5.7% in a day. The read takes ten minutes, and you'd rather do it before the spinoff paperwork arrives than after. If you can't tell which way you hold it, that's a question for your next review.