Why did GAAP EPS jump so much, and is that sustainable?

GAAP diluted EPS rose to $4.54 from $1.34, primarily because of a roughly $6.97 billion pre-tax litigation-related reversal recorded in other income. This is a non-recurring item and is not indicative of ongoing operating performance. Adjusted EPS of $2.77, up 2.2%, is the better gauge of underlying earnings.

How much is STELARA affecting growth?

STELARA sales fell 33.7% reported to $1.6 billion in Q1 2025 as biosimilar competition intensified. It subtracted about 810 basis points from Innovative Medicine's operational growth, meaning the rest of the segment grew substantially to offset the decline. Investors should watch for continued erosion as biosimilar penetration deepens.

Did the company change its full-year outlook?

Operational sales guidance was raised to $91.6–$92.4 billion, midpoint $92.0 billion, from $90.9–$91.7 billion. This increase reflects the addition of CAPLYTA through the Intra-Cellular Therapies acquisition. Adjusted operational EPS guidance was held at $10.50–$10.70, implying 6.2% growth at the midpoint, with tariffs, acquisition dilution, and currency cited as offsets.

What is the dividend change and what does it mean for income investors?

The quarterly dividend rose 4.8% to $1.30 per share from $1.24, for an annualized indicated dividend of $5.20. The next payment is June 10, 2025, to holders of record on May 27, 2025, which is also the ex-dividend date. The 63rd consecutive annual increase reinforces the company's track record as a dividend growth stock.

How did international markets perform compared with the U.S.?

U.S. sales grew 5.9% to $12.3 billion, while international sales fell 1.8% reported to $9.6 billion. Operationally, international sales grew 2.1%, but a 3.9-point currency headwind from the stronger dollar turned that into a reported decline. Currency remains a meaningful risk to reported international results.

JNJ 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 15, 2025. Cited figures are marked; the original filing is the authoritative source.

Johnson & Johnson reported first-quarter 2025 results on April 15, 2025, with reported sales of $21.9 billion^a, up 2.4% year over year, and operational growth of 4.2%.

Adjusted operational growth, which excludes acquisitions, divestitures, and currency, was 3.3%. GAAP diluted EPS rose to $4.54^b from $1.34, but this was driven by a large non-recurring benefit: a $6.97 billion pre-tax litigation-related reversal in other income. Adjusted diluted EPS grew 2.2% to $2.77, and adjusted net earnings rose 1.9% to $6.71 billion.

Investors should weigh the adjusted figures more heavily when assessing underlying earnings power. The Innovative Medicine segment grew operational sales 4.2%^c, led by oncology (DARZALEX, CARVYKTI, ERLEADA, RYBREVANT/LAZCLUZE), immunology (TREMFYA, SIMPONI), and neuroscience (SPRAVATO). STELARA continued to decline sharply, subtracting roughly 810 basis points from segment growth.

MedTech grew operational sales 4.1%, helped by the Shockwave acquisition and Abiomed, while Orthopaedics declined. U.S. sales rose 5.9%, while international sales fell 1.8% reported, with currency a headwind of 3.9 points. Management raised its 2025 operational sales guidance to $91.6^d–$92.4 billion (midpoint $92.0 billion, up from $91.3 billion), reflecting the addition of CAPLYTA from the Intra-Cellular Therapies acquisition.

Adjusted operational EPS guidance was maintained at $10.50–$10.70, or 6.2% growth at the midpoint, despite tariff costs, acquisition dilution, and foreign exchange. The company also declared a 4.8% dividend increase to $1.30 per quarter, its 63rd consecutive annual raise.

02—Key points

Key Highlights

Reported Q1 2025 sales rose 2.4% to $21.9B; operational growth was 4.2% and adjusted operational growth was 3.3%.
GAAP diluted EPS of $4.54 (vs. $1.34) was inflated by a ~$7.0B pre-tax litigation-related reversal; adjusted EPS rose 2.2% to $2.77.
Innovative Medicine operational sales grew 4.2%, but STELARA erosion weighed heavily (about 810 bps drag).
MedTech operational sales grew 4.1%, with Shockwave and Abiomed contributing while Orthopaedics declined 3.1%.
FY2025 operational sales guidance raised to $91.6–$92.4B (midpoint $92.0B), reflecting the CAPLYTA addition from the Intra-Cellular acquisition.
FY2025 adjusted operational EPS guidance maintained at $10.50–$10.70 (6.2% midpoint growth) despite tariffs, dilution, and FX.
Quarterly dividend raised 4.8% to $1.30 per share ($5.20 annualized), marking 63 consecutive years of increases.

03—Questions

Frequently Asked Questions

Why did GAAP EPS jump so much, and is that sustainable?
GAAP diluted EPS rose to $4.54 from $1.34, primarily because of a roughly $6.97 billion pre-tax litigation-related reversal recorded in other income. This is a non-recurring item and is not indicative of ongoing operating performance. Adjusted EPS of $2.77, up 2.2%, is the better gauge of underlying earnings.
How much is STELARA affecting growth?
STELARA sales fell 33.7% reported to $1.6 billion in Q1 2025 as biosimilar competition intensified. It subtracted about 810 basis points from Innovative Medicine's operational growth, meaning the rest of the segment grew substantially to offset the decline. Investors should watch for continued erosion as biosimilar penetration deepens.
Did the company change its full-year outlook?
Operational sales guidance was raised to $91.6–$92.4 billion, midpoint $92.0 billion, from $90.9–$91.7 billion. This increase reflects the addition of CAPLYTA through the Intra-Cellular Therapies acquisition. Adjusted operational EPS guidance was held at $10.50–$10.70, implying 6.2% growth at the midpoint, with tariffs, acquisition dilution, and currency cited as offsets.
What is the dividend change and what does it mean for income investors?
The quarterly dividend rose 4.8% to $1.30 per share from $1.24, for an annualized indicated dividend of $5.20. The next payment is June 10, 2025, to holders of record on May 27, 2025, which is also the ex-dividend date. The 63rd consecutive annual increase reinforces the company's track record as a dividend growth stock.
How did international markets perform compared with the U.S.?
U.S. sales grew 5.9% to $12.3 billion, while international sales fell 1.8% reported to $9.6 billion. Operationally, international sales grew 2.1%, but a 3.9-point currency headwind from the stronger dollar turned that into a reported decline. Currency remains a meaningful risk to reported international results.

04—Continue

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