Johnson & Johnson Inc. (NYSE:JNJ) will report earnings for the fourth quarter on January 23rd. It looks like it will be able to meet expectations but I don't think it will raise guidance.

JNJ is 230 separate companies in fields ranging from bandages to pharmaceuticals. With $52 billion in sales and $11 billion in profits, it's best known for its corporate citizenship. As I noted in Value Leadership, JNJ put its credo to the test in 1982 when seven people died in Chicago after ingesting cyanide-laced Tylenol. JNJ immediately pulled all the bottles from stores around the country and reintroduced the product with tamper-proof seals six weeks later. The decision to pull the 31 million bottles at a cost of $100 million was made by managers without consulting the CEO, who was unreachable in an airplane at the time.

Eighteen analysts who cover JNJ expect it to earn 80 cents a share in the fourth quarter and $3.74 for the full year 2006. These estimates are 8.9% and 6.9% higher, respectively, than during the same period in 2005. According to Forbes, The Goldman Sachs Group (NYSE: GS) believes that JNJ is likely to be able to weather the storm that will take place in mid-2007 due to a Medicare Drug Benefit anniversary which is anticipated to dampen volume growth. Goldman believes that with its June 2006 $16.6 billion acquisition of Pfizer Inc.'s (NYSE: PFE) Consumer Healthcare business -- which features strong brands such as Listerine and Nicorette -- JNJ will suffer less than pure-play pharmaceutical companies.

But at a P/E of 18, JNJ is trading 2.7 times higher than its forecast earnings growth rate of 6.7%. An earnings miss or tepid guidance could poison JNJ stock. Will JNJ miss-and-lower, meet-and-maintain, or beat-and-raise?

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, a Professor of Management at Babson College, and editor of The Cohan Letter. He has no financial interest in Goldman Sachs, Johnson & Johnson. or Pfizer securities.

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.