J&J Beats Q3 Earnings, Plans Orthopedics Business Spinoff
The healthcare giant raised its full-year 2025 sales outlook and announced its intent to separate its DePuy Synthes unit to focus on higher-growth markets.
Johnson & Johnson delivered a strong third-quarter performance, beating analyst expectations and raising its financial outlook for the year. In a significant strategic move, the healthcare conglomerate also announced its plan to spin off its Orthopaedics division into a new, independent publicly traded company.
The company , posting an adjusted earnings per share of $2.80, which edged out the consensus estimate of $2.77. Buoyed by the solid performance, Johnson & Johnson raised its full-year 2025 sales guidance to $93.7 billion, signaling confidence in its continued growth trajectory, particularly within its MedTech and Pharmaceutical divisions.
Alongside the robust earnings report, the company unveiled its , which will be known as DePuy Synthes. This move aims to create a more focused and agile Johnson & Johnson, concentrating on its higher-growth innovative medicine and medical device segments. The standalone DePuy Synthes is expected to be a leading global player in orthopedics, from joint reconstruction and trauma to sports medicine.
This decision follows the successful 2023 spinoff of its consumer health business, Kenvue, and continues J&J's strategy of streamlining operations to unlock greater value. Management stated the separation will allow both companies to tailor their capital allocation and strategic goals to their respective markets more effectively. The transaction is intended to be tax-free for shareholders.
to the combination of the earnings beat and strategic restructuring. The focus on high-growth areas like cardiovascular devices, including recent acquisitions like Abiomed and Shockwave, has been a key point of interest for investors. The spinoff is seen as a logical step in reshaping the company into a more innovative and less diversified healthcare powerhouse, poised to better compete in the rapidly evolving MedTech and pharmaceutical landscapes.