Johnson & Johnson (JNJ) Tuesday said quarterly profit rose 9 percent as surging demand for medical devices and consumer products upstaged prescription medicines facing competition from cheaper generics.

J&J also signaled that it remains keen to proceed with its planned $25.4 billion acquisition of rival medical device maker Guidant Corp. (GDT) despite a recent recall of Guidant heart devices and warnings about the safety of the products.

"The impact of product notifications and recalls is something we're evaluating in conjunction with Guidant management," J&J's chief financial officer, Robert Darretta, told analysts on a conference call.

The health-care company said net earnings rose to $2.68 billion, or 89 cents per share, in the second quarter from $2.46 billion, or 82 cents per share, a year earlier.

Excluding special items, it earned 93 cents per share, 2 cents better than the average forecast among analysts polled by Reuters Estimates.

Net earnings included merger-related charges of $353 million and a tax adjustment gain of $225 million related to a charge taken in late 2004 for the planned repatriation this year of overseas profits.

J&J, the world's most diversified health-care company, has bucked the recent trend among drugmakers of divesting other businesses to focus solely on highly profitable prescription drugs. J&J's philosophy for decades -- borne out in the second quarter -- is that sales growth of medical devices and consumer goods can help buffer slowdowns in drug sales.

J&J said global revenue rose 11 percent in the second quarter to $12.8 billion but would have been up only 9 percent if not for the weak dollar, which raises the value of overseas sales when they are converted back to U.S. currency.

Global sales of medical devices and diagnostics rose nearly 20 percent to $4.9 billion, with strong performance across all major product lines, including its Cypher stent (search) to prop open coronary arteries, orthopedic and spinal devices, wound-care products, blood glucose monitoring devices, and contact lenses.

Cypher, which competes against a drug-coated stent sold by Boston Scientific Corp. (BSX), had quarterly U.S. sales of $320 million, or a 40 percent market share.

J&J's worldwide sales of prescription drugs rose 3.7 percent to $5.6 billion, helped by growth in demand for its drugs for schizophrenia, arthritis and attention deficit disorder. But U.S. sales of drugs fell slightly, hurt by generic competition for anti-fungal drug Sporanox (search), pain patch Duragesic (search), and pain drug Ultracet.

Global revenue from consumer products jumped 13.9 percent to $2.3 billion, with growing demand for Splenda sweetener and the company's Neutrogena and RoC lines of skin-care products.

Based on its strong performance so far this year, J&J raised its full-year earnings forecast to a range of $3.44 to $3.47 per share, up as much as 12 percent from 2004. It previously forecast 2005 profit of $3.41 to $3.43 per share.

Shares of J&J, based in New Brunswick, N.J., were up 23 cents to $64.83 on the New York Stock Exchange.