Johnson & Johnson (J&J) beat quarterly earnings forecasts on strong prescription drug revenue and a weakening dollar, and it reassured investors that it did not expect its blockbuster Remicade arthritis drug to face US competition this year. 

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The company also said on Tuesday that it remained on track to boost profit margins significantly this year, in part from cost cuts. 

In a possibly encouraging signal for other drugmakers that will be reporting results in coming weeks, J&J said the strong dollar took a 3.3% bite out of global sales in the first quarter - half the impact in the prior period - as the currency`s value eased somewhat.

J&J shares rose as much as 2.7% to an all-time high of $113.95. The ARCA Pharmaceutical Index of large drugmakers was up 0.6%, outpacing slight gains for the broad stock market. 

Until this year, J&J shares had underperformed the healthcare sector every year since 2009 as the company grappled with patent expirations on important drugs and a slew of product recalls and manufacturing setbacks for its consumer division.

But J&J has recently introduced a number of fast-growing medicines. Pharmaceutical sales rose 5.9% to $8.2 billion in the first quarter, with increased demand for the Imbruvica cancer drug and Invokana diabetes treatment.

Sales of Remicade, J&J's biggest product, jumped 11.2% to $1.78 billion. But investors have been concerned it could be hurt by Inflectra, a cheaper version developed by South Korea`s Celltrion Inc in partnership with Pfizer Inc. US regulators approved Inflectra earlier this month, but a continuing patent battle between J&J and Celltrion has delayed its introduction. 

J&J Chief Financial Officer Dominic Caruso said on Tuesday that strong patents should shield Remicade from biosimilar competition in 2016 and potentially for years to come.

The company is upgrading plants that make its consumer medicines, including Tylenol, to address longstanding quality control problems. 

J&J is also restructuring its struggling medical device business to focus on areas like artificial knees and devices for trauma surgery.

Medical device sales slipped 2.4% to $6.1 billion in the quarter, while sales of consumer products fell 5.8% to $3.2 billion. 

Total sales rose 0.6% to $17.48 billion, matching the analysts` average estimate compiled by Thomson Reuters I/B/E/S.

Net earnings fell to $4.29 billion, or $1.54 per share, from $4.32 billion, or $1.53 per share, a year earlier.

Excluding special items, J&J earned $1.68 per share, topping Wall Street expectations of $1.65.

"Overall it was a pretty solid quarter, with J&J beating earnings estimates and delivering on sales," said Edward Jones analyst Ashtyn Evans. 

J&J said that based on current exchange rates, it expected sales of $71.2 billion to $71.9 billion in 2016, up from its January forecast of $70.8 billion to $71.5 billion. It raised its earnings outlook to between $6.53 and $6.68 a share from a prior range of $6.43 to $6.58.