Why did JNJ's Q3 earnings exceed forecasts significantly?

Johnson & Johnson's (JNJ) Q3 earnings exceeded forecasts significantly due to several key factors:

1. **Strong Revenue Growth**: Johnson & Johnson reported a total revenue of $22.52 billion for the quarter, which included a revenue surprise of $60 million. This indicates that the company's revenue exceeded market expectations, contributing to the overall earnings beat.

|code|Ticker|Name|Date|Revenue Surprise|Total Revenue|market_code|
|---|---|---|---|---|---|---|
|JNJ|JNJ.N|Johnson & Johnson|2024 Q1|-2.7E7|2.1383E10|169|
|JNJ|JNJ.N|Johnson & Johnson|2024 Q2|1.37E8|2.2447E10|169|
|JNJ|JNJ.N|Johnson & Johnson|2024 Q3|3.11E8|2.2471E10|169|
|JNJ|JNJ.N|Johnson & Johnson|2024 Q4|6.0E7|2.252E10|169|

2. **Net Income Surprise**: The company's net income for the quarter was $3.43 billion, with an EPS surprise of $0.02. This suggests that not only the total revenue but also the net income per share exceeded expectations, further contributing to the earnings beat.

|code|Ticker|Name|Date|Net Income|market_code|
|---|---|---|---|---|---|
|JNJ|JNJ.N|Johnson & Johnson|2024 Q1|3.255E9|169|
|JNJ|JNJ.N|Johnson & Johnson|2024 Q2|4.686E9|169|
|JNJ|JNJ.N|Johnson & Johnson|2024 Q3|2.694E9|169|
|JNJ|JNJ.N|Johnson & Johnson|2024 Q4|3.431E9|169|

3. **Zacks Research Analyst's Insights**: Zacks Research, a leading equity research firm, had reduced its Q3 2024 earnings per share estimates for Johnson & Johnson in August 2024. Despite these estimates being lowered, the company's actual EPS exceeded expectations, indicating that the company's performance was stronger than anticipated.
4. **Cantor Fitzgerald's Brokers Expectations**: Cantor Fitzgerald, another financial broker, had decreased their FY2024 earnings per share estimates for Johnson & Johnson in July 2024. The company's performance in Q3 2024 disproved these concerns, as the company not only met but exceeded earnings expectations.
5. **Consistent Performance in Innovative Medicine**: Johnson & Johnson's Innovative Medicine franchise has been a significant contributor to the company's growth. The company's focus on oncology, as evidenced by the potential of RYBREVANT plus LAZCLUZE, indicates a strategic priority that is likely to drive future growth.

In conclusion, Johnson & Johnson's Q3 earnings exceeded forecasts significantly due to strong revenue growth, net income surprise, and the company's strategic focus on high-growth areas such as oncology. These factors, combined with the company's innovative product pipeline, position Johnson & Johnson for continued growth and profitability.