Johnson & Johnson reported a better-than-expected first-quarter profit on Tuesday and raised its full-year sales forecast, helped by strong demand for its cancer treatments.
The company's blockbuster rheumatoid arthritis drug Remicade has come under pressure from cheaper copies of the treatment, pushing the company to focus on newer treatments such as cancer drugs.
Quarterly sales of its cancer treatments surged 45 percent to $2.31 billion, accounting for nearly a quarter of its pharmaceutical unit's revenue.
In contrast, Remicade's first-quarter sales fell 16.9 percent to $1.39 billion.
The company said it plans to streamline its global supply chain and expects pre-tax savings of $600 to $800 million by 2022.
The healthcare conglomerate also said it would increase its capital expenditure by 15 percent in the United States, bringing the total to $30 billion over the next four years, as it reinvests the windfall from U.S. tax reforms.
For the full year, J&J raised its sales forecast to a range of $81.0 billion to $81.8 billion from $80.6 billion to $81.4 billion estimated previously.
"The first-quarter print should ease concerns around tempered revenue growth," BMO Capital Markets analyst Joanne Wuensch said.
Sales at J&J's consumer products unit, which makes Band-Aids, Neutrogena beauty products and Tylenol, rose 5.3 percent to $3.40 billion.
Net earnings fell to $4.37 billion, or $1.60 per share, in the latest quarter from $4.42 billion, or $1.61 per share, a year earlier.
Excluding items, the company earned $2.06 per share. Analysts on average were expecting earnings of $2.02 per share, according to Thomson Reuters I/B/E/S.
Total sales jumped 12.6 percent to $20.01 billion, beating analysts' estimates of $19.46 billion.
Shares in the Dow-component were marginally up at $132.6 before the bell.
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