Tax reform has been a hot-button issue with corporate America during the current earnings season, and as one of the largest multinational conglomerates in the world, Johnson & Johnson (NYSE:JNJ) was prepared to see a lot of impacts from the new tax laws. Smart investors know to look beyond the one-time items in the short run and instead stay focused on the long-range growth prospects of the fundamental business, and there, J&J has made substantial progress over the past year.

Coming into Tuesday's fourth-quarter financial report, Johnson & Johnson shareholders were ready to see a tax reform hit but wanted continued growth in revenue and earnings. After adjusting for the expected one-time tax-related item, J&J's results were solid, and the company is upbeat about its prospects for 2018.

Sign at TriRock Philadelphia triathlon showing Johnson & Johnson sponsorship.

Image source: Johnson & Johnson.

How Johnson & Johnson fared to finish 2017

Johnson & Johnson's fourth-quarter financial results showed a solid pace in the healthcare conglomerate's overall business. Revenue climbed 11.5% to $20.2 billion, doing even better than the roughly 10% growth that most investors were expecting to see. Adjusted net income came in at $4.78 billion, up about 10% from year-ago levels, and that worked out to adjusted earnings of $1.74 per share, topping the consensus forecast for $1.72 per share among those following the stock.

Most attention in the report centered on the massive tax-related charge that Johnson & Johnson took. Tax reform resulted in a whopping $13.6 billion special charge, and that not only caused J&J to suffer a nearly $4 per share loss on a GAAP basis, but it also went a long way toward nearly eliminating the company's official profits for the entire year.

J&J's operating performance was sound. Out of the company's overall growth, Johnson & Johnson saw operational revenue rise 9.4% compared to the year-earlier quarter, with the remainder of its top-line gains coming from favorable foreign currency exposure.

The key pharmaceutical segment reported revenue gains of nearly 18% for the quarter, with greater than 20% gains in international sales within the segment. As we've seen in past quarters, the healthcare giant's oncology unit produced huge growth of nearly 40%, based largely on strength in cancer drugs Darzalex, Imbruvica, and Zytiga. Immunology also had noteworthy performance, with Crohn's Disease fighter Stelara helping to offset lower sales of Remicade.

Gains elsewhere were more modest but still substantial. The medical devices unit posted overall sales gains of 8%, again weighted toward the international side of the business. Growth in cardiovascular products and vision care was especially strong, helping to offset weakness in diabetes care and the orthopedic division. Only in consumer products did J&J see more sluggish growth rates, with the segment posting a 3% rise in revenue that was held back by an outright decline in domestic consumer sales. Over-the-counter medicines remained solid, but declines in oral and baby care as well as women's health products held back Johnson & Johnson's overall consumer performance.

What's next for Johnson & Johnson?

Johnson & Johnson CEO Alex Gorsky celebrated a good 2017 for the company. "We are pleased with the passage of recent legislation modernizing the U.S. tax system," Gorsky said, "which enables Johnson & Johnson to invest in innovation at higher levels to help address the most challenging unmet medical needs facing healthcare today." The CEO also noted strong stock performance in 2017 and the success of its recent acquisitions.

Looking ahead, J&J has high hopes for its businesses. In particular, the healthcare giant pointed to continued growth and near-term product pipeline success as key for the pharma segment, while the medical device unit will look to enhance partnerships and innovation to bolster new growth opportunities. In the consumer segment, J&J pointed to the categories of e-commerce and other distribution channels as priorities, as well as a relaunch of its baby-centered franchise.

Johnson & Johnson's guidance for 2018 shows modest but significant growth goals. The healthcare company sees full-year revenue of $80.6 billion to $81.4 billion, which would reflect operational growth of about 4%. Full-year earnings should come in between $8 and $8.20 per share on an adjusted basis, and that works out to growth of around 7% to 10% operationally.

Johnson & Johnson investors seemed satisfied by the report, and the stock climbed a fraction of a percentage point in premarket trading following the announcement. With the big charge from tax reform now behind it, J&J hopes to see tax savings in the future that should bolster its organic growth and keep the fundamental business moving in the right direction throughout the coming year and beyond.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Johnson & Johnson. The Motley Fool has a disclosure policy.