Johnson & Johnson (NYSE:JNJ) owes much of its recent success to the strength of its pharmaceutical division. Even though the company also has extensive exposure to other parts of the healthcare field, including medical devices and over-the-counter consumer products, the drug business has been J&J's biggest growth area for years. Recently, though, Johnson & Johnson has seen its revenue growth become more sluggish, and that has some investors concerned about whether the company is suffering through a temporary slow period or dealing with longer-term structural changes that could dampen its future prospects.

Coming into Tuesday's second-quarter financial report, Johnson & Johnson investors were looking for modest gains on the top and bottom lines, as well as some favorable comments about the recent acquisition of Actelion and its impact on the company going forward. J&J's drug unit had another weak quarter, with segment sales actually declining, but the healthcare specialist was optimistic about its ability to take full advantage of its current opportunities. Let's take a closer look at Johnson & Johnson and what its latest results mean for investors.

Johnson & Johnson triathlon sign.

Image source: Johnson & Johnson.

Revenue challenges continue for J&J

Johnson & Johnson's second-quarter financial results continued the troubling trends that shareholders have seen in recent quarters, although the news wasn't all bad. Revenue rose 1.9% to $18.84 billion, which was more than $100 million less than most investors had expected from the healthcare giant. GAAP earnings again declined from year-earlier levels, but after accounting for tax provisions, adjusted net income of $5.02 billion was up 3% from the second quarter of 2016. Adjusted earnings of $1.83 per share topped the consensus forecast among those following the stock for $1.80 per share.

Looking more closely at Johnson & Johnson's segments, the key pharmaceutical unit had mixed results. Overall segment sales fell 0.2%, with currency impacts putting enough downward pressure on the numbers to offset a 1% operational top-line increase. Domestic sales were down 2.6%, but international sales climbed 3.3% even when you include adverse foreign exchange conditions. J&J also blamed a one-time positive adjustment in the year-earlier quarter for some of the sluggishness this quarter. The company called out solid performance from cancer fighters Darzalex and Imbruvica, and it highlighted expanded indications for Darzalex and the FDA approval of plaque psoriasis treatment Tremfya earlier this month after the second quarter had ended.

J&J saw stronger results in its medical devices unit, although most of the gains were attributable to acquisitions. Sales rose nearly 5% including the purchase of Abbott Medical Optics. Without the purchase, worldwide sales would have been up 1.1%. However, consumer sales were also relatively weak, as gains of 1.7% came generally from acquisitions. Organic worldwide consumer sales fell 0.8%.

What's ahead for Johnson & Johnson?

CEO Alex Gorsky tried to emphasize operational efficiency and optimism about the future. "Our second-quarter results reflect strong adjusted earnings growth," Gorsky said, "and we are optimistic that the investments we are making will accelerate our sales growth in the second half of this year." The CEO highlighted J&J's strong drug pipeline and the new opportunities that the Actelion acquisition opens to help boost revenue going forward.

Johnson & Johnson also increased its guidance for the full 2017 year once again. A $300 million boost to revenue projections brought J&J's top-line target to $76.1 billion. An increase of between $0.07 and $0.12 per share in adjusted earnings guidance set a new range of $7.12 to $7.22 per share.

Still, Johnson & Johnson has to make more progress in order to fight the downward impact of aging blockbuster treatments. Anti-inflammatory treatment Remicade still accounts for more than a sixth of J&J's pharmaceutical sales, but it's dealing with competition from rival drug makers. The $250 million hit to sales was a 14% decline from year-ago levels, and it took big gains from both Darzalex and Imbruvica to offset Remicade's falling revenue.

Johnson & Johnson investors were had a modestly positive response to the news, and the stock rose almost 1% in pre-market trading following the announcement. Yet the report leaves unanswered exactly when and how J&J expects to stoke its growth back to the levels at which shareholders would be more comfortable. Until that strategic vision becomes more evident, many investors will remain nervous about Johnson & Johnson's ability to keep its leadership status atop the healthcare field.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.