Johnson & Johnson (JNJ) raised its 2026 sales outlook after a third quarter in which reported sales growth slowed to 5.9% from 6.6% in the second quarter and GAAP earnings fell to $0.09 a share, reflecting the proposed talc resolution, the Firefly Bio acquisition and the Sail Biomedicines collaboration.

The health care company’s October guidance table estimates full-year 2026 reported sales of $101.0 billion to $101.4 billion, or 7.2% to 7.6% growth, versus $100.8 billion to $101.4 billion, or 7.0% to 7.6%, in its comparison labeled July 29, 2026. Adjusted EPS guidance in the same comparison moved to $11.05 to $11.15, or 2.4% to 3.3% growth, from $10.96 to $11.11, or 1.6% to 3.0%.

Chairman and Chief Executive Officer Joaquin Duato said the company’s “strong third-quarter performance and increased sequential growth reflect the accelerating momentum of our focused portfolio.”

Reported sales were $25.399 billion, up 5.9% from $23.993 billion a year earlier. Operational growth was 6.0% and adjusted operational growth was 6.1%. Net earnings were $210 million, down 95.9% from $5.152 billion. The $0.09 EPS reflected a special charge for the proposed talc litigation resolution, the Firefly Bio acquisition, and a Sail Biomedicines collaboration. Adjusted EPS was $2.59, down 7.5% from $2.80. Adjusted net earnings were $6.339 billion.

The pre-tax litigation-related adjustment was $5.519 billion, versus $15 million a year earlier. Other (income) expense, net, swung to a $5.780 billion expense from $478 million of income. Gross profit margin was 68.1%. Research and development expense rose 26.7% to $4.652 billion, or 18.3% of sales, with a separate $339 million line item for in-process R&D impairments. Estimated third-quarter year-to-date free cash flow was about $15.100 billion.

U.S. sales were $14.959 billion, up 9.1% on a reported, operational, and adjusted operational basis. International sales were $10.440 billion, up 1.5% reported, 1.8% operational, and 1.9% adjusted operational. Europe sales were $5.405 billion. Western Hemisphere excluding the U.S. was $1.385 billion. Asia-Pacific and Africa were $3.650 billion.

Innovative Medicine sales were $16.757 billion, up 7.7% reported, 7.9% operational, and 8.0% adjusted operational. Growth was primarily driven by TREMFYA and new products in Other in Immunology, DARZALEX, CARVYKTI, TECVAYLI, RYBREVANT/LAZCLUZE, and ERLEADA in Oncology, and SPRAVATO and CAPLYTA in Neuroscience, partially offset by STELARA (an approximate 690-basis-point impact), SIMPONI/SIMPONI ARIA, and REMICADE in Immunology, OPSUMIT/OPSYNVI in Pulmonary Hypertension, and IMBRUVICA in Oncology. U.S. Innovative Medicine sales were $10.447 billion. International Innovative Medicine sales were $6.310 billion.

MedTech sales were $8.642 billion, up 2.5% on all three measures. Growth was primarily driven by electrophysiology products and Shockwave in Cardiovascular, contact lenses in Vision, and trauma in Orthopaedics. U.S. MedTech sales were $4.512 billion. International MedTech sales were $4.130 billion.

The company received U.S. market authorization for OTTAVA, which it described as the world’s first table-integrated soft tissue robotic system, FDA approval of IMAAVY for warm autoimmune hemolytic anemia, and FDA priority review for RYBREVANT FASPRO in advanced head and neck cancer. It also completed the Firefly Bio acquisition and announced a Sail Biomedicines collaboration on in vivo CAR-T programs.

Reported GAAP restructuring expense was $181 million. A supply-chain program primarily in Innovative Medicine is expected to cost $650 million to $750 million and be substantially completed by the end of fiscal 2029. Surgery-franchise restructuring in MedTech is expected to be substantially completed by the end of fiscal 2026. The pre-tax adjustment for Orthopaedics separation-related items was $369 million.

Duato said that progress, together with strategic investments, “gives us clearer line of sight to double-digit growth by the end of the decade.”