Johnson & Johnson (JNJ) revealed an anticipated $400 million in tariff costs for the year, contributing to a slight dip in shares, down nearly 1% to $153.21. The tariffs, especially those related to the Trump Administration’s recent actions, primarily affect J&J’s MedTech sector, with significant impact from China’s retaliatory tariffs.
Key Insights:
- Tariff Breakdown: The $400 million cost includes a combination of steel and aluminum tariffs, as well as Mexico and Canadian import duties, with China tariffs being the most substantial.
- Impact on Operations: CFO Joseph Wolk noted that the tariff costs will sit on the balance sheet and be gradually relieved through inventory and P&L in future periods.
- Analyst Views: Analysts from Truist suggest pricing won’t mitigate the impact due to existing contractual agreements but note that U.S. manufacturing will help offset some costs over time.
Financial Performance:
- Q1 2025 Results: J&J posted $11 billion in profits and $21.9 billion in sales, with adjusted earnings of $2.77 per share, exceeding expectations.
- MedTech Growth: The MedTech unit saw a 2.5% sales increase (4.1% operational), driven by Abiomed and wound closure products. However, Orthopaedics saw a slight downturn of 4.2%.
Looking ahead, J&J has raised its 2025 sales guidance to $91-91.8 billion, up from prior projections, bolstered by new innovations in areas like IBD treatments and neuroscience.
Follow MEDWIRE.AI for more updates on MedTech companies and global healthcare trends.
