J&J CEO Alex Gorsky. Image: Johnson & Johnson.

Healthcare giant Johnson & Johnson (NYSE:JNJ) has worked hard to establish itself as the preeminent conglomerate in the industry, using its exposure to pharmaceuticals, medical devices, and over-the-counter consumer remedies to its best advantage. Yet like consumer giant Procter & Gamble (NYSE:PG), J&J has struggled recently because of the strong U.S. dollar, which has weighed on both companies' ability to grow sales and earnings.

Coming into Tuesday's fourth-quarter financial report, investors in Johnson & Johnson expected to see some downward pressure on revenue, and the company did a good job of overcoming those pressures to produce bottom-line growth for the quarter. Still, with full-year sales and adjusted earnings per share falling, J&J investors want the company to do more in 2016. Let's look more closely at Johnson & Johnson and what its latest results say about its prospects over the coming year.

J&J: Looking healthier?
The same trends that investors have seen throughout 2015 showed up in Johnson & Johnson's fourth-quarter report, but arguably not to the same extent as in past quarters. Revenue for the quarter once again fell year over year, but only by 2.4% to $17.8 billion. The company's bottom line actually jumped 28% to $3.22 billion, largely due to a nearly $2.2 billion swing in its other income/expense line. Even after adjusting for one-time items, earnings of $1.44 per share topped analysts' consensus forecast by $0.02.

Yet the strenthening U.S. dollar continued to weigh on Johnson & Johnson. The company said that its quarterly revenue took a hit of 6.8 percentage points from currency issues, wiping out a 4.4% operational gain in sales. Although domestic sales rose 8%, international sales plunged 11.7%, thanks to 13 percentage points of downward pressure from the strong dollar. After factoring out currencies, hepatitis C-related sales, and one-time items like acquisitions and divestitures, its worldwide sales were actually up 6.5%.

Among J&J's three main business units, the pharmaceutical segment was the only one to show growth in dollar terms, edging up 0.8% thanks in large part to a nearly 13% rise in U.S. sales. The medical devices unit was relatively strong in the U.S., rising 6.7% domestically, but weak international results pulled the unit's overall sales down 3.3%. The consumer segment brought up the rear with declines both worldwide and domestically, adding up to a 7.9% drop in overall revenues for the unit. Those consumer results were consistent with the sales declines that Procter & Gamble reported in its latest quarter, stemming in part from currency issues but also reflecting challenges in organic growth.

Johnson & Johnson pointed to several winning product lines. Over-the-counter drugs Tylenol and Motrin helped the consumer segment, and J&J once again called out diabetes drug Invokana and plaque-psoriasis treatment Stelara as helping its sales growth in the pharmaceutical arena. In medical devices, the company benefited from sales of endocutters and biosurgical products, as well as insulin pump products and various cardiovascular and orthopedic devices.

For the full year, J&J's sales fell 5.7% to $70.1 billion, with currency issues costing it 7.5 percentage points of growth. Adjusted net income also fell to $17.4 billion, dropping almost 5% and producing adjusted earnings of $6.20 per share.

What's ahead for Johnson & Johnson?
CEO Alex Gorsky characterized 2015 as providing "strong underlying growth" despite currency headwinds. Gorsky says he remains convinced that 2016 will keep positive momentum going, arguing that "our core business is very healthy, and the recent decisive actions we've taken in support of each of our businesses position us well to drive sustainable long-term growth."

Johnson & Johnson's guidance made it clear, though, that the robust dollar will continue to play a key role in holding back growth. The company predicted that 2016 sales will come in between $70.8 billion and $71.5 billion, up 2.5% to 3.5% on an operational basis, but implying a roughly two percentage point hit from currencies. Similarly, adjusted 2016 earnings of $6.43 to $6.58 per share would be up 5.3% to 7.7% on an operational basis.

One key aspect to J&J's future is how its restructuring will affect its performance. A week ago, the company said it would restructure some of its medical devices businesses in order to encourage innovation and address unmet needs of patients. Johnson & Johnson hopes to generate as much as $1 billion in annual savings from the measures by the end of 2018, which could help immensely in supporting earnings growth.

Investors were comfortable with Johnson & Johnson's results, sending the stock up 1% in pre-market trading after the announcement. With solid organic growth prospects, all Johnson & Johnson needs to do is to outlast the dollar's strength to see its true performance show up more clearly in its financials in 2016 and beyond.