Health-care giant Johnson & Johnson yesterday posted a 3.5 percent increase in fourth-quarter profit as higher sales, especially for products overseas, were mostly offset by the first charge for a major acquisition. Despite the solid performance, shares fell 1 percent.

The New Brunswick, N.J.-based maker of contraceptives, contact lenses, prescription drugs and baby products reported net income of $2.17 billion, or 74 cents a share, up from $2.10 billion, or 70 cents a share, in 2005's final quarter.

Excluding an after-tax charge of $217 million for the acquisition of Pfizer Consumer Healthcare late in the fourth quarter, income would have been $2.4 billion, or 81 cents a share, the company said.

Revenue totaled $13.68 billion, up 8.5 percent from $12.61 billion in the last quarter of 2005.

Analysts surveyed by Thomson Financial were expecting earnings of 79 cents a share and sales of $13.68 billion.

Sales totaled $2.57 billion in Johnson & Johnson's consumer health-care division, up 11 percent; $5.95 billion in the pharmaceutical division, up 8.5 percent; and $5.17 billion in the medical devices and diagnostics division, up 7.2 percent.

"It's really typical J&J," said Scott Thoma, medical-device analyst at Edward Jones. "They still delivered some decent results," despite problems such as safety questions over its drug-coated stent and generic competition that slowed sales of the painkiller Duragesic.

Johnson & Johnson employs several thousand people at Philadelphia-area sites, including Centocor Inc. and McNeil Consumer & Specialty Pharmaceuticals.

Still, Johnson & Johnson shares fell 68 cents, or 1 percent, to close at $66.50 on the New York Stock Exchange.

Health-care analyst Les Funtleyder at Miller Tabak & Co. L.L.C. said investors likely were hoping the company would surpass analysts' expectations, not just meet them.

Johnson & Johnson chairman and chief executive officer William C. Weldon stressed the value of Pfizer's "iconic brands," such as Listerine and Visine, and how the $16.6 billion acquisition, completed Dec. 20, brings more balance to its three business segments.

For Johnson & Johnson's full fourth-quarter and year-end financial report, go to: