Contact lenses

Through the purchase of Pfizer's (PFE, 26.88) healthcare products business, JNJ greatly expanded its consumer segment.

This quarter, sales grew 48.5% or 6.7% organically to $3.5 billion.

Again, international growth outpaced growth in the US, led by strong sales of its reformulated Tylenol OTC upper respiratory products, Listerine, Aveeno, Benadryl, and Rogaine product lines.

The Bottom Line JNJ's first quarter results are a testament to the broad-based nature of its product portfolio.

As such, we recommend investors continue to add to positions.

We remain confident in the company's overall strategy driving earnings leverage and top line growth, led by several new product launches and the new Consumer Health unit, in addition to the opportunity for share repurchases.

Management raised its FY07 cash EPS guidance from $3.93-$3.98 to $4.02-$4.07, which reflects the strong Q1 topline performance.

In addition, management noted it was comfortable with the consensus in the mid-point of this range.

The stock trades at 16.5x FY07 and 15.2x FY08 estimates.

This is a discount to all three of its comparative groups: the S&P 500 Pharma Index (22.4x), Health Care Equipment (46.2x), and the Household Products Index (21.9x).

-Kimberly DuB...

backed out of an acquisition agreement and instead was purchased by Boston Scientific Corp.Analysts surveyed by Thomson Financial had expected earnings per share of $1.05 and sales of $14.44 billion.Sales totaled $15.04 billion, up nearly 16 percent from $12.99 billion a year earlier.

Operational sales growth, which excludes the impact of new products and currency exchange rates, was 6.3 percent.Revenues from the medical devices and diagnostics division edged up 6.2 percent to $5.32 billion, hurt by a 14 percent slide at Cordis, J&J's cardiovascular device business.

Sales of Cordis' drug-coated stents, tiny metal scaffolds that prop open arteries and slowly release medicine, were problematic, Chief Financial Officer Dominic Caruso told analysts during a conference call.

He was referring to new concerns about the safety and effectiveness of J&J's Cypher and other drug-coated stents.Sales of prescription drugs, J&J's biggest business segment, rose 10.6 percent to $6.22 billion, led by strong sales of epilepsy tr...