Johnson & Johnson on Tuesday reported better-than-expected first-quarter earnings, with strong sales growth of medical devices offsetting revenue declines for its prescription drugs and tepid growth for its array of consumer products.

The diversified healthcare company said it earned $4.53 billion, or $1.62 per share, compared with $3.51 billion, or $1.26 per share, in the year-earlier period.

Excluding special items, such as an after-tax gain of $910 million from litigation matters, the company earned $1.29 per share. Analysts on average had expected $1.27 per share, according to Thomson Reuters I/B/E/S.

Swiss drugmaker Novartis AG on Tuesday pleased investors by reporting first-quarter earnings of $1.29 per share, beating the average estimate of $1.11. It cited strong sales of new blood pressure drugs Exforge and Tekturna, and cancer drugs Zometa and Femara.

Novartis, however, did not raise its 2010 sales growth target despite an 18 percent rise in first-quarter sales, saying big flu vaccine shipments would dwindle throughout the rest of the year.

J&J's global company revenue rose 4 percent to $15.63 billion, in line with Wall Street forecasts, but would have been essentially unchanged if not for foreign exchange factors.

J&J trimmed its full-year profit forecast to between $4.80 and $4.90 per share, excluding items, from its earlier view of $4.85 to $4.95.

The company said the adjustment was due to changes in foreign currency rates, and incorporates initial costs of recently enacted U.S. healthcare reform.

Eli Lilly & Co on Monday cut its own 2010 forecast by about 35 cents per share due to projected costs of the revamped healthcare, including more generous price rebates that U.S. drugmakers will have to give patients insured by the Medicaid program for the poor. Lilly's move stirred concerns that other drugmakers would have to chop their profit forecasts due to healthcare-reform costs.

But Glenn Novarro, an analyst with RBC Capital Markets, said J&J's small adjustment suggests confidence it will not be greatly hurt by the costs and was not as bad as Lilly's.

J&J's earnings report overall was in line with expectations, although medical device sales surpassed forecasts and its prescription drugs disappointed investors for the fourth or fifth quarter in a row, Novarro said.

J&J drug sales have been badly hurt by generic competition for its Topamax epilepsy treatment. The product's sales plunged 75 percent in the first quarter to $148 million.

Novarro said J&J's drug business could rebound within the next few years if J&J wins approvals for important new products, including two potential blockbusters: Xarelto to prevent blood clots and telaprevir for hepatitis C.

J&J shares slipped 0.2 percent to $65.89 in morning trading on the New York Stock Exchange. Novartis' shares rose 1.24 percent in Switzerland.

(Reporting by Ransdell Pierson, editing by Dave Zimmerman and Maureen Bavdek)