Pharma-giant Johnson & Johnson (JNJ) recently announced more favorable-than-anticipated third-quarter 2025 outcomes. The pharmaceutical company maintained its pattern of exceeding earnings forecasts and also surpassed sales projections. The firm increased its annual revenue outlook.
JNJ's strong quarterly results, despite the current uncertainty in the U.S. economy, especially related to increased import tariffs, highlight the resilience of this pharmaceutical company amid a larger market downturn. This could encourage investors to explore the company's growth opportunities via healthcare exchange-traded funds (ETFs), which have significant exposure to this well-diversified drug manufacturer (see: all the Healthcare ETFs here).
These prospective ETFs include iShares U.S. Pharmaceuticals ETF (IHE), Health Care Select Sector SPDR Fund(XLV), iShares U.S. Healthcare ETF (IYH), First Trust Nasdaq Biotechnology ETF(FTXH) and Fidelity MSCI Healthcare Index ETF (FHLC).
However, prior to examining the details of these ETFs, let's get a brief look at JNJ's overall performance in the third quarter.
A Quick Overview of JNJ's Third-Quarter Performance
JNJ's earnings per share (EPS) for the third quarter, at $2.80, exceeded the Zacks Consensus Estimate by 1.1% and saw a 15.7% increase compared to the same period last year. Revenue rose 6.8% annually to reach $23.99 billion, also surpassing the Zacks Consensus Estimate by 1%.
On a segment basis, sales from both Innovative Medicines and MedTech increased by 6.8% compared to the previous year.
JNJ's top-selling multiple myeloma treatment, Darzalex, saw a 21.7% increase in sales compared to the previous year, reaching $3.67 billion in the third quarter. Sales of its other cancer medication,Erleada,Increased by 18.4% compared to the previous year, while sales for the new medications, Carvykti and Tecvayli, rose by 83.5% and 31.3%, respectively, in the same timeframe. Nevertheless, sales of Imbruvica and Zytiga dropped by 7.8% and 25.1%, respectively.
Sales growth in electrophysiology products, along with its Cardiovascular division—Abiomed and Shockwave—helped drive the segment's revenue performance.
Regarding its 2025 forecast, Johnson & Johnson increased its sales projection from $93.2 to $93.6 billion to $93.5 to $93.9 billion. Adjusted operational sales growth (excluding currency effects, acquisitions, and divestitures) is anticipated to fall between 3.5% and 4.0% (previously 3.2% to 3.7%). Nevertheless, the company continues to anticipate adjusted EPS within the range of $10.80 to $10.90.
JNJ also stated its plan to split off its Orthopaedics division, DePuy Synthes, from the MedTech segment, which has been experiencing some challenges.
After JNJ's positive results, Raymond James increased its price target for Johnson & Johnson from $174 to $209, noting that the company's lineup of upcoming products is expected to fuel "a strong new period of growth by the end of the decade" (according to Investing.com).
ETFs in Focus
iShares U.S. Pharmaceuticals ETF (IHE)
This fund offers access to 47 companies involved in producing prescription medications, non-prescription drugs, or vaccines. Among them, Johnson and Johnson leads with a 23.47% stake.
IHE has increased by 8.6% so far this year and incurs fees of 36 basis points (bps). Trading volume is strong, averaging 47,906 shares per day.
Healthcare Select Sector SPDR Fund(XLV)
This fund offers access to 60 companies operating in the pharmaceutical, biotechnology, healthcare equipment and supplies, healthcare providers and services, life sciences tools and services, and healthcare technology sectors. Among them, Johnson and Johnson ranks second, with an 8.88% stake.
XLV has increased by 3.6% so far this year and incurs a fee of 8 basis points. It is traded with a high volume of approximately 17.8 million shares.
iShares U.S. Healthcare ETF (IYH)
This fund offers access to 107 U.S. companies operating in the healthcare equipment and services, pharmaceuticals, and biotechnology sectors. Among them, Johnson and Johnson ranks second, representing an 8.55% stake.
IYH has increased by 3.9% so far this year and incurs fees of 38 basis points. Trading volume is strong, averaging 472,166 shares per day.
First Trust Nasdaq Biotechnology ETF(FTXH)
This fund provides access to 50 American pharmaceutical and biotechnology firms. Among them, Johnson and Johnson holds the second position, representing a 7.56% stake.
FTXH has increased by 7.6% so far this year and incurs a fee of 60 basis points. The trading volume is strong, averaging 4,150 shares per day.
Fidelity MSCI Healthcare Index ETF(FHLC)
This fund provides access to 323 firms within the healthcare industry. Among them, Johnson and Johnson holds the second position, representing a 7.52% stake.
FHLC has increased by 5% so far this year and incurs fees of 8 basis points. The trading volume is strong, averaging 155,000 shares per day.
This piece was first released on Zacks Investment Research (Healthy urvival).