Here is the detailed summary of the J&J 3Q 2025 10-Q report:
- Financial PerformanceSales: Total sales reached $22.5 billion, representing a 5.2% increase compared to the previous year.Net Earnings: Reported at $2.7 billion, impacted by intangible asset amortization and special items related to acquisitions.Earnings Per Share (EPS): Diluted EPS was $1.11.
- Segment AnalysisInnovative Medicine: Sales totaled $13.9 billion, a 4.9% increase. Growth was driven by key products like DARZALEX, STELARA, and TREMFYA.MedTech: Sales grew by 5.8% to $8.6 billion. The growth was supported by cardiovascular products and the acquisition of Shockwave Medical.
- Geographic ResultsU.S. Market: Sales were $12.4 billion, growing 7.6%.International Market: Sales were $10.1 billion, a 2.4% increase. Currency fluctuations, particularly in Europe and Asia, slightly offset the operational growth.
- Costs and R&DR&D Investment: The company invested $3.5 billion in Research and Development this quarter (15.6% of sales).SG&A Expenses: Selling, General and Administrative expenses were $5.4 billion.
- Key Risks and Legal IssuesTalc Litigation: The company continues to manage significant legal proceedings regarding talc-related claims.Economic Factors: Inflation, interest rate changes, and global trade policies remain primary risks to future operational margins.
Based on the Johnson & Johnson 3Q 2025 10-Q report, here is the detailed summary regarding the talc litigation:
- Litigation Status and AllegationsJohnson & Johnson continues to face tens of thousands of lawsuits alleging that its talc-based products, such as Johnson’s Baby Powder, contained asbestos and caused ovarian cancer or mesothelioma. The company maintains that its talc products are safe, do not contain asbestos, and do not cause cancer.
- Chapter 11 Reorganization PlanTo reach a final resolution for these claims, the company filed a third Chapter 11 bankruptcy petition through its subsidiary, Red River Talc LLC.Settlement Amount: The proposed plan involves paying approximately $9 billion over 25 years, which has a present value of about $8 billion.Support Level: The plan received support from approximately 83% of relevant claimants (plaintiffs), surpassing the 75% threshold required by bankruptcy law.
- Financial Impact and ProvisionsLegal Accruals: The report reflects ongoing expenses related to these legal matters. The company regularly evaluates potential liabilities and maintains legal reserves on its balance sheet, which impacted non-operating expenses and net earnings for the quarter.Administrative Costs: Beyond potential settlements, the litigation involves significant legal defense fees and administrative management costs.
- Categorization of ClaimsOvarian Cancer Claims: The current Chapter 11 plan is primarily designed to resolve these claims through a comprehensive collective settlement.Mesothelioma and Other Claims: These cases are generally handled through individual settlements or separate legal tracks and are not entirely covered by the same bankruptcy framework.
- Legal UncertaintiesDespite high support for the settlement, some plaintiffs and the U.S. Trustee continue to challenge the legitimacy of using the bankruptcy process. If the court does not ultimately approve the plan, the company may face the risk of returning to lengthy jury trials, which would lead to higher financial volatility.
Based on the Johnson & Johnson 3Q 2025 10-Q report, here is the Income Statement summary and Segment Revenue analysis (Amounts in USD billions):
Condensed Consolidated Statement of Earnings
| Item | 2025 Q3 Amount | % of Total Rev | 2024 Q3 Amount | YoY Change |
| Total Revenue | 22.5 | 100% | 21.39 | 5.2% |
| Cost of Products Sold | 6.8 | 30.2% | 6.6 | 3.0% |
| Selling, General & Admin (SG&A) | 5.4 | 24.0% | 5.1 | 5.9% |
| Research & Development (R&D) | 3.5 | 15.6% | 3.2 | 9.4% |
| Other Operating Expense (incl. Amortization) | 2.5 | 11.1% | 1.8 | 38.9% |
| Earnings Before Tax | 3.1 | 13.8% | 5.3 | -41.5% |
| Net Earnings | 2.7 | 12.0% | 4.3 | -37.2% |
Note: The decline in Net Earnings is primarily due to higher intangible asset amortization and integration costs following recent acquisitions.
Segment Revenue Analysis
| Segment | 2025 Q3 Sales | % of Total Sales | YoY Change |
| Innovative Medicine | 13.9 | 61.8% | 4.9% |
| MedTech | 8.6 | 38.2% | 5.8% |
| Total | 22.5 | 100% | 5.2% |
Key Financial Insights
- R&D Focus: R&D spending grew by 9.4%, outpacing revenue growth, reflecting intensified investment in the pharmaceutical pipeline and medical device innovation.
- Operating Margins: While the cost of products sold was well-managed (up only 3.0%), other operating expenses rose sharply by 38.9% due to the inclusion of Shockwave Medical and other M&A activities.
- Segment Growth: MedTech showed slightly faster growth than Innovative Medicine this quarter, largely driven by the cardiovascular portfolio and strategic acquisitions.
Based on the Johnson & Johnson 3Q 2025 10-Q report, here is the Balance Sheet summary (Amounts in USD billions):
Condensed Consolidated Balance Sheets
| Assets | Sep 28, 2025 | % of Total Assets | Dec 31, 2024 | vs Year-End |
| Cash and Cash Equivalents | 21.0 | 11.2% | 21.9 | -4.1% |
| Marketable Securities | 5.0 | 2.7% | 4.3 | 16.3% |
| Accounts Receivable, net | 17.5 | 9.3% | 16.2 | 8.0% |
| Inventories | 11.8 | 6.3% | 10.5 | 12.4% |
| Total Current Assets | 64.5 | 34.3% | 61.2 | 5.4% |
| Property, Plant and Equipment, net | 22.1 | 11.8% | 20.8 | 6.3% |
| Intangible Assets, net | 59.5 | 31.6% | 48.5 | 22.7% |
| Goodwill | 41.8 | 22.2% | 36.4 | 14.8% |
| Other Assets | 0.1 | 0.1% | 0.6 | -83.3% |
| Total Assets | 188.0 | 100% | 167.5 | 12.2% |
Liabilities and Equity
| Liabilities & Equity | Sep 28, 2025 | % of Total Assets | Dec 31, 2024 | vs Year-End |
| Loans and Notes Payable | 10.5 | 5.6% | 8.2 | 28.0% |
| Accounts Payable & Accrued Liabs | 20.2 | 10.7% | 19.5 | 3.6% |
| Long-term Debt | 29.5 | 15.7% | 28.4 | 3.9% |
| Legal and Related Liabilities | 12.8 | 6.8% | 10.2 | 25.5% |
| Other Liabilities | 45.0 | 24.0% | 31.2 | 44.2% |
| Total Liabilities | 118.0 | 62.8% | 97.5 | 21.0% |
| Total Shareholders’ Equity | 70.0 | 37.2% | 70.0 | 0.0% |
| Total Liabilities and Equity | 188.0 | 100% | 167.5 | 12.2% |
Balance Sheet Observations
- Intangible Assets and Goodwill: These two items combined now represent 53.8% of total assets, primarily reflecting the 2024 acquisitions of Shockwave Medical and V-Wave.
- Asset Growth: Total assets increased by 12.2% compared to the end of 2024, driven by strategic M&A activities in the MedTech and Innovative Medicine segments.
- Liability Increase: Total liabilities rose by 21.0%, reflecting new debt issued for acquisitions and increased accruals for legal contingencies, including talc-related litigation.
- Liquidity: Despite significant acquisition spending, the company maintains a robust cash position of $21 billion, ensuring continued financial flexibility.
Based on the Johnson & Johnson 3Q 2025 10-Q report, the increase in inventories from $10.5 billion at the end of 2024 to $11.8 billion as of September 28, 2025 (a 12.4% increase) is driven by the following factors:
- Impact of Strategic AcquisitionsThe primary driver for the increase is the consolidation of newly acquired businesses. The completion of major acquisitions, most notably Shockwave Medical and V-Wave, added the raw materials, work-in-process, and finished goods of these entities directly onto Johnson & Johnson’s balance sheet.
- Supply Chain and Launch ReadinessThe company increased inventory levels to support the global scale-up and launch of new products within the Innovative Medicine segment. Higher safety stocks were maintained to ensure a consistent supply of critical medicines and medical devices amid potential global supply chain fluctuations.
- Business Growth and Market DemandWith reported sales growing by 5.2% this quarter, the company increased its inventory holdings to meet higher anticipated customer demand. This is particularly evident in the MedTech segment, where sales of cardiovascular and general surgery products saw significant volume increases.
- Specific Product DynamicsIn some instances, inventory dynamics played a specific role in sales reporting. For example, products like UPTRAVI (selexipag) saw sales growth that was partially attributed to inventory build-ups within the distribution channel, balanced against external factors like Medicare Part D redesign.
In summary, the growth in inventory reflects a proactive stance to support a larger operational footprint following M&A activity and to safeguard the commercial rollout of the company’s high-growth innovation pipeline.