On Tuesday, Johnson & Johnson (NYSE:JNJ) will release its quarterly report, and investors have to be pleased with the health-care conglomerate's ability to keep moving its earnings and revenue in the right direction. Even as drug manufacturers Pfizer (NYSE:PFE) and Merck (NYSE:MRK) face the prospect of falling revenue this year, Johnson & Johnson has been able to use its triple attack of pharmaceuticals, over-the-counter consumer products, and medical devices to find ways to keep growing.

Johnson & Johnson is a ubiquitous company, with products that people around the world know almost from birth. Yet even though products like its baby shampoos and Band-Aid bandages might be the most familiar things J&J offers, the real growth story for Johnson & Johnson lately has come from its pharmaceutical division. Can the health-care giant manage to keep finding new ways to bolster its growth even as many investors start to look more critically at health care-related stocks? Let's take an early look at what's been happening with Johnson & Johnson over the past quarter and what we're likely to see in its report.

Stats on Johnson & Johnson

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$18.00 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Johnson & Johnson earnings give investors another boost?
Analysts have been just a little bit downbeat about Johnson & Johnson earnings in recent months. They've left their first-quarter estimates unchanged, but they've nicked off $0.03 per share -- or about half a percent -- from their full-year 2014 projections. That hasn't held the stock back, though, with shares gaining almost 4% since early January.

Johnson & Johnson's fourth-quarter report showed just how important pharmaceuticals have become to the company's overall success. Making up nearly 40% of sales last year, the pharma segment saw substantial growth both from its key Remicade rheumatoid arthritis drug and newer treatments such as prostate cancer-treating Zytiga and psoriasis fighter Stelara. By contrast, though, medical-device sales struggled, and the consumer-products division also failed to see the level of growth that investors had expected.

One problem Johnson & Johnson has faced is that hospitals and other health-care professionals aren't certain enough about the future prospects for their business to make immense capital investments in J&J medical device products. Once the Affordable Care Act fully plays out and once health-care providers can wrap their heads around future business opportunities in the industry, Johnson & Johnson could see its medical device business start getting traction again.

Yet the collapse of biotech stocks could actually refocus investor attention on Johnson & Johnson. Many players in biotech are highly speculative, living or dying by the clinical trial results that they're able to produce. By contrast, Johnson & Johnson has had great success with its pharma pipeline, while largely avoiding the extent of the patent-cliff issues that drove sales at Pfizer, Merck, and other pharma rivals sharply lower. In the long run, Johnson & Johnson will have its own patent challenges, but for now, the defensive characteristics that Johnson & Johnson stock offers investors looks highly attractive in light of the stock market's volatility so far in 2014.

In the Johnson & Johnson earnings report, watch to see whether the pharma side of the business continues to shine. Although good news from pharmaceuticals is always welcome, Johnson & Johnson will eventually have to start firing on all three cylinders in order to reach its full potential.

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