(Reuters) - Johnson & Johnson (N:JNJ) raised its sales forecast for the year on Tuesday but kept its outlook for full-year profit unchanged, disappointing investors and sending its shares down 1.6 percent.
The healthcare conglomerate, whose stock had climbed about 3 percent over the previous six days, reported better-than-expected profit in the first quarter, helped by strong demand for its cancer treatments.
J&J said it was not revising its earnings forecast higher for the year because certain divestments it previously expected to make this year might be pushed into 2019.
"I'm definitely surprised by the stock reaction," said Gabelli Funds portfolio manager Jeff Jonas. "There was some expectation that they would raise EPS guidance this quarter just because foreign exchange has gotten better and the business did do pretty well."
Shares were down $1.99 at $129.63 in late morning trading on the New York Stock Exchange.
Quarterly sales of its cancer treatments surged 45 percent to $2.31 billion, accounting for nearly a quarter of its pharmaceutical unit's revenue.
The company's blockbuster rheumatoid arthritis drug Remicade has come under pressure from cheaper copies, pushing the company to focus on newer treatments such as cancer drugs. 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 pretax savings of $600 million to $800 million by 2022.
J&J said it would boost capital expenditure by 15 percent in the United States, bringing the total to $30 billion over the next four years as it reinvests a 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.
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.