JNJ · 10-Q · 2026Q2 · Full report
Segment Profitability
JOHNSON & JOHNSON · 2026-07-23 · Importance 69 · Surprise 64 · No source text
Fiscal six-month consolidated earnings before tax decreased to $12.7 billion, or 25.8% of sales, from $20.1 billion, or 44.1%, primarily because fiscal 2025 included a $7.0 billion talc reserve reversal. Innovative Medicine income before tax margin declined to 36.4% from 37.0% due to $0.2 billion of restructuring costs, unfavorable STELARA product mix, and higher commercial investments. MedTech income before tax margin fell to 13.8% from 15.9% because of $0.4 billion of Orthopaedics separation costs, higher R&D and commercial investments, and tariffs in cost of products sold. In the fiscal second quarter, Innovative Medicine margin improved to 38.1% from 36.5%, while MedTech margin declined to 13.2% from 14.1%.
Key facts
- Consolidated earnings before provision for taxes on income for the fiscal six months of 2026 was $12.7 billion representing 25.8% of sales as compared to $20.1 billion in the fiscal six months of 2025 representing 44.1% of sales. source
- The intangible asset amortization expense included in cost of products sold for the fiscal six months of 2026 and 2025 was $2.5 billion and $2.4 billion, respectively. source
- Innovative Medicine income before tax for the fiscal six months of 2026 was $11,566 million on segment sales of $31,810 million, representing 36.4% of segment sales versus 37.0% a year ago. source
- Research and development expense total was $7,180 million for the fiscal six months ended June 28, 2026 (14.5% of sales) versus $6,741 million (14.8% of sales) in prior year, a percent increase over the prior year of 6.5%. source
- The intangible asset amortization expense included in cost of products sold for the fiscal second quarters of 2026 and 2025 was $1.2 billion and $1.3 billion, respectively. source
- MedTech income before tax for the fiscal six months of 2026 was $2,416 million on segment sales of $17,562 million, representing 13.8% of segment sales versus 15.9% a year ago. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -29.2% | Consolidated earnings before provision for taxes on income for the fiscal six months of 2026 was $12.7 billion representing 25.8% of sales… |
| margin | negative | realized | -0.6% | Innovative Medicine income before tax for the fiscal six months of 2026 was $11,566 million on segment sales of $31,810 million,… |
| operating_income | negative | realized | -0.4% | The intangible asset amortization expense included in cost of products sold for the fiscal six months of 2026 and 2025 was $2.5 billion… |