Johnson & Johnson beat Wall Street’s quarterly sales expectations and raised its full-year outlook, a show of confidence as the pharmaceutical industry faces the dual threats of tariffs and a crackdown on drug pricing.

J&J’s strong second quarter comes as U.S. President Donald Trump floats the idea of levies on the sector. On Tuesday night he said

tariffs on drugs

could “probably” come at the end of the month, starting low and working their way up.

A week earlier, Trump told reporters he would impose tariffs as high as 200 per cent on drug companies if they don’t shift more of their manufacturing to the U.S. over the next year to 18 months.

A slow ramp-up to tariffs would actually be good news, J&J Chief Financial Officer Joe Wolk said in an interview.

The delay shows “there’s an understanding you can’t put up a biopharmaceutical manufacturing facility overnight,” Wolk said. “As long as those conversations continue to occur, I think we’re in a pretty good position.”

Shares were up almost 7 per cent in trading in New York on Wednesday.

J&J is often an industry bellwether as the first heath-care company to report earnings each quarter. Its performance is being closely watched as drugmakers operate under the spectre of potential tariffs and a new policy that seeks to make U.S. drug prices among the lowest in the world.

The sunnier outlook also reflects the growing confidence across American companies overall. When Trump first returned to office, companies struggled to make sense of his historical tariff threats. Now, as they’re seeing the risk of worst-case trade scenarios ebb, profit projections are improving.

“For a company like J&J to increase guidance in the face of all this regulatory and political uncertainty I think is the most notable takeaway,” Mizuho’s Jared Holz said. The boost is still “characteristically conservative,” Bloomberg Intelligence analysts John Murphy and Mila Bankovskaia wrote, and the company is likely to raise its projections again as the year progresses.

Sales in the quarter were US$23.7 billion, the New Brunswick, N.J.-based company said in a statement Wednesday, ahead of analysts’ US$22.8 billion average estimate. J&J increased the midpoint of its 2025 revenue projection by US$2 billion to US$93.4 billion. The company raised the midpoint of its full-year adjusted earnings outlook by U.S. 25 cents to between US$10.80 and US$10.90 per share.

The company cut in half the amount of money it expects to spend on tariffs this year to US$200 million. That figure reflects levies that have already been enacted and doesn’t account for potential pharma-specific tariffs that may come in the future.

J&J is grappling with a multibillion-dollar patent cliff for its blockbuster psoriasis treatment, Stelara, which faces off-brand competition in the US and Europe. The company is counting on newer medicines, including its top-selling cancer treatment Darzalex and immune medicine Tremfya, to make up for Stelara’s decline.

J&J is also dealing with an uncertain legal future after a federal judge rejected its plan to settle thousands of talc-related lawsuits, leaving the company to fight claims its baby powder caused cancer individually in court.

Darzalex beat estimates for the quarter, bringing in US$3.54 billion, while Tremfya exceeded expectations with US$1.19 billion. Tremfya, approved to treat inflammatory bowel disease, is now on pace to reach US$10 billion in peak yearly sales, Wolk said.

The company’s medical devices business contributed US$8.54 billion, surpassing projections. Stelara, whose key patents expired last year, brought in US$1.65 billion during the quarter, missing analysts’ view in what could be a sign that J&J’s fading cash cow might decline faster than expected.

The White House has also threatened to impose a policy that would force drug companies to charge the U.S. government the lowest prices they offer to other wealthy countries for some patients. In a May executive order, Trump asked them to either voluntarily change their prices or face regulatory action. The order, which was light on details, also called for pushing other countries to pay more for prescription drugs.

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J&J said in March it would invest more than US$55 billion domestically over the next four years, joining a slew of pharmaceutical firms promising to spend more in the U.S. since Trump’s inauguration. J&J didn’t disclose how it would allocate the total, saying it would be spread across manufacturing, R&D spending and investments in technology.

Bloomberg.com