Johnson & Johnson (NYSE: JNJ) issued current-year sales and profit guidance that exceeded Wall Street expectations, even as the healthcare giant warned of a “hundreds of millions” dollar impact from a recent drug pricing agreement with the U.S. government.

Earlier this month, Johnson & Johnson agreed to lower drug prices for U.S. consumers in exchange for exemptions from broad tariffs, aligning with similar moves by other major pharmaceutical companies. The initiative followed intensified efforts by President Donald Trump to reduce drug costs, an issue that has gained prominence ahead of November's midterm elections.

Chief Financial Officer Joseph Wolk said details of the agreement could not be disclosed, but indicated the financial impact would amount to hundreds of millions of dollars. Wolk added that it was a testament to the company's execution that its 2026 forecast still exceeded analyst expectations despite the pricing headwind.

Johnson & Johnson said it expected current-year sales of $100 billion to $101 billion, above consensus estimates of $98.88 billion. Full-year earnings were projected at $11.43 to $11.63 per share, compared with expectations of $11.45.

For the fourth quarter, the company reported revenue of $24.56 billion, up 9.1% year over year and above projections of $24.15 billion. Results were supported by strong demand for medical technology products and a 27% surge in sales of the Darzalex blood cancer treatment.

Adjusted earnings per share totaled $2.46, exceeding analyst estimates of $2.04, despite declining sales of the psoriasis drug Stelara amid rising biosimilar competition.