Another quarter in 2010, another lowered earnings guidance for Johnson & Johnson (NYSE: JNJ). At least the year is half over for the health-care giant.

Last quarter, it was a combination of health-care reform and the strengthening dollar that dented the guidance. This quarter, the multitude of product recalls and pricing pressure in Europe caused the company to lower its profit guidance again.

 

January 2010

April 2010

July 2010

2010 Per-Share Earnings Guidance Excluding Special Items

$4.85-$4.95

$4.80-$4.90

$4.65-$4.75

Source: Company releases.

If it drops any more, we'll be getting dangerously close to the non-GAAP $4.63 per share that the company earned last year.

The ironic thing is that the second quarter wasn't that bad. Even after factoring in the $200 million in lost revenue due to the recall-related plant closure, Johnson & Johnson still managed to increase both revenue and earnings year over year. Through the first half of the year, adjusted earnings are up 3.7%.

So what we have here is a business with solid products -- sales of HIV drug Prezista were up 47% and myeloma treatment Velcade jumped 25% -- but the company has some operational issues hampering sales growth. Which one will win out in the long run? Johnson & Johnson has been around for a century; the answer seems obvious.

Of course even if you assume a turnaround is a foregone conclusion, it's still unclear exactly when Johnson & Johnson will get back on its feet. Maybe Novartis (NYSE: NVS) and Simcere Pharmaceutical (NYSE: SCR) are better bets in the short run as John Keeling points out our CAPS members believe. I'd throw Gilead Sciences (Nasdaq: GILD) and Intuitive Surgical (Nasdaq: ISRG) into consideration as well because both have solid near-term growth prospects.

On the other hand, if you do decide to jump in now, you'll have a solid 3.6% dividend yield to pay you for waiting. Assuming, of course, Johnson & Johnson doesn't cut that, too.