Johnson & Johnson beat quarterly earnings forecasts and slightly boosted its 2016 outlook, citing strong prescription drug revenue and a weakening dollar that will help improve sales in overseas markets.
In a possibly encouraging signal for other drugmakers that will be reporting results in coming weeks, J&J said the strong dollar took a 3.3 percent bite out of global sales - half the impact in the prior quarter - as the currency's value eased somewhat.
Shares of J&J, the maker of Band-Aids and Tylenol, rose slightly to $111.50 in pre-market trading.
Until this year, shares of J&J had underperformed the healthcare sector every year since dating back to 2009 as the company grappled with patent expirations on important drugs and a slew of product recalls and manufacturing setbacks for its consumer division.
But J&J has recently introduced a number of fast-growing treatments for cancer, diabetes and other diseases. Pharmaceutical sales rose 5.9 percent to $8.2 billion in the first quarter, helped by growing demand for the Imbruvica cancer drug, Xarelto blood clot preventer and Invokana treatment for diabetes. J&J is upgrading plants that make its consumer medicines, including Tylenol, to address longstanding quality control problems.
The company is also restructuring its struggling medical device business to focus on areas like artificial knees and devices for trauma surgery.
J&J said sales rose 0.6 percent in the first quarter to $17.48 billion, matching the analysts' average estimate compiled by Thomson Reuters I/B/E/S.
Net earnings fell to $4.29 billion, or $1.54 per share, from $4.32 billion, or $1.53 per share, a year earlier. Excluding special items, the company earned $1.68 per share, topping Wall Street expectations of $1.65.
"Overall it was a pretty solid quarter, with J&J beating earnings estimates and delivering on sales," said Edward Jones analyst Ashtyn Evans.
J&J said that based on current exchange rates, it expected sales of $71.2 billion to $71.9 billion in 2016, up from its January forecast of $70.8 billion to $71.5 billion. It raised its earnings outlook to between $6.53 and $6.68 a share from a prior range of $6.43 to $6.58.
Medical device sales slipped 2.4 percent to $6.1 billion, while sales of consumer products fell 5.8 percent to $3.2 billion.
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