NEW YORK (CNNMoney.com) - Tuesday is a big day for Johnson & Johnson: not only is it announcing fourth-quarter results, but it faces a crucial deadline in the ongoing bidding war over Guidant.

J&J (up $0.12 to $60.92, Research), which has three times revamped its offer for medical-device maker Guidant (up $0.06 to $76.01, Research), has until Tuesday to revamp it again. Boston Scientific (down $0.25 to $23.34, Research), another medical-device maker, is the top bidder for Guidant. Since 2004, Boston Scientific and J&J have been fighting for Guidant, a maker of implantable defibrillators and pacemakers.

In the latest move, Boston Scientific last week put in a $27 billion offer, and Guidant acknowledged it was "superior" to the $24.2 billion from J&J.

The outcome of this bidding battle is important to J&J's strategy of hedging its bets in three major market areas -- drugs, medical devices and consumer goods. The strategy is to position the company to survive in a struggling drug market in 2006 and beyond.

"Diversified companies have a little bit better prospects at the moment," said Andrew Heyward, analyst for Ragen Mackenzie, a subsidiary of Wells Fargo, who has a "hold" rating from J&J. "That's been [J&J's] business model for years and years and it's helping them out right now."

J&J's fourth-quarter report is expected to show revenue growth of 3 percent and earnings growth of 8 percent, according to consensus from Thomson Financial. That's not bad, considering the state of Big Pharma these days.

Drug stocks, once considered a safe haven, took a beating in 2005, losing 9 percent of value in 2005, according to Thomson/Baseline. J&J's stock price fell 8 percent in 2005.

Only 44 percent of J&J's revenue in the first nine months of 2005 came from pharmaceutical sales -- 38 percent came from medical devices and 18 percent came from consumer products, such as dental floss and baby powder.

J&J's diversified revenue stream could give it leverage to ride out rough times in weak markets.

"Being into devices, drugs and consumer products is a good mix of business," said Doug Christopher, analyst for Crowell, Weedon & Co. "It gives [J&J] a balance in health care. It helps them in terms of cross-marketing, in getting into different customers."

That explains the heated battle for Guidant, second-biggest player in the $10 billion industry for implantable pacemakers and defibrillators, behind Medtronic (up $0.01 to $58.83, Research) and ahead of St. Jude (up $0.52 to $53.12, Research). Whichever company controls Guidant, controls the second-place slot.

While drug stocks have taken a beating -- influenced by pressure from generic drug makers, not-too-promising pipelines, and fallout from Merck's (down $0.47 to $32.78, Research) series of Vioxx lawsuits -- the industry for large makers of medical devices looks comparatively solid. St. Jude revenue is projected to grow 26 percent in 2006, according to consensus from Thomson Financial, while Medtronic revenue is projected to grow 15 percent.

Compare that to 2006 revenue projections for major drugmakers: 1 percent growth for Pfizer and Bristol-Myers (down $0.26 to $22.07, Research), and a slide of 5 percent for Merck. Straddling the middle, J&J is projected to grow 7 percent in 2006.

And then there's consumer products. This covers a wide array of products stamped with the corporate logo, from diapers to shampoo to Band-Aids, produced by about 200 operating companies.

J&J's consumer products, an area of business missing from the portfolios of many other drug makers, provides a reliable stream of revenue for the company, said Heyward, the analyst for Ragen Mackenzie.

"Consumer products are always a help," said Heyward. "It provides the company with good cash flow, if not a lot of growth."

To read more about why Guidant is valuable to J&J and Boston Scientific, click here.