Johnson & Johnson’s revenue has slumped for a second straight year, prompting its chief executive to make an extraordinary pitch to soothe investors and defend the company’s handling of 17 costly recalls.

The health care giant, hammered by the weak global economy, growing pricing pressures and recalls that have kept many popular nonprescription medicines off store shelves, reported Tuesday a 12 percent profit decline and a 5.5 percent drop in sales for the fourth quarter.

Revenue fell 0.5 percent in 2010, after dropping 3 percent in 2009 –  the company’s  first annual decline since the Depression.

Chairman and Chief Executive William C. Weldon tried to reassure analysts and investors that J&J has its manufacturing and other problems under control, in an unusually lengthy, sometimes repetitive conference call.

Still  J&J shares dropped $1.23, or 2 percent, to $60.99 in afternoon trading after initially dropping 2.4 percent  –  a big decline for a huge, diversified company that rarely sees stock volatility.

J&J’s stock has lagged the benchmark S&P 500 Index in the last year and is below the $62 level where it traded five years ago.

“The Teflon has come off J&J –  with a vengeance,” said analyst Steve Brozak of WBB Securities.

The adjusted earnings from the maker of Tylenol, medical devices and biologic drugs matched Wall Street estimates but revenue fell short and its earnings estimate for this year was well below analysts’ current forecasts.

Because of the weak forecast, institutional investors “voted with their feet today,” said Erik Gordon, a professor and analyst at University of Michigan’s Ross School of Business.

The New Brunswick, N.J.-based company reported fourth quarter net income of $1.94 billion, or 70 cents per share, down from $2.21 billion, or 79 cents per share, a year earlier.

Excluding one-time items, earnings would have been $1.03 per share, matching analysts’ expectations. J&J took an after-tax charge of $922 million for litigation settlements, a recall of poorly fitting DePuy hip implants and increasing J&J’s product liability reserve.

The company’s revenue fell to $15.64 billion from $16.6 billion a year ago. It was also below the $16 billion expected by analysts polled by FactSet.

Johnson & Johnson has been hurt by 17 recalls since September 2009 covering multiple McNeil Consumer Health products, plus contact lenses and hip replacements, and the lengthy shutdown of a  factory involved. Lost revenue from the recalled products reduced 2010 sales by $900 million, 50 percent more than J&J predicted last year.

Results also were hit by the weak global economy squeezing consumer health spending, the U.S. health care overhaul and European government demands for lower prices.

Those concerns and uncertainty over how J&J will fix the consumer unit will keep the stock price from rising for a quarter or two, said Les Funtleyder, an analyst and portfolio manager for the Miller Tabak Health Care Transformation Fund.

“Despite some weaknesses in the core business, our view is that health care utilization in the U.S. picks up this year (with the improving economy) and J&J benefits,” he added.

During the conference call Tuesday, Weldon said pricing pressures from hospitals and governments won’t go away anytime soon, if ever, but that expected continued sales growth in emerging markets, and several important new drugs awaiting approval, will help J&J recover.

Weldon, 62, also said the company is committed to restoring its over-the-counter medicines to the quality consumers expect.

Gordon suggested J&J would have a hard time winning back customers who’ve switched to cheaper store brands.

Gordon said investors may start pressuring J&J’s board to push Weldon out –  as Pfizer Inc. did with its CEO last month, after 4 1/2 years of languishing share prices. He said Weldon’s job “should not be safe,” but the J&J board has “a lot of retired guys put on there by Weldon” who are being kind to him.

Brozak said Weldon gave “a classic sales presentation,” not an earnings report. “Weldon is paid the big bucks to provide a solution. I didn’t hear a solution” from him.

Sales of consumer products such as Tylenol, Benadryl and Rolaids– all recalled for  product contamination and other problems — were down the most. Sales in that division fell 15 percent, to $3.6 billion.

Sales of prescription drugs, which include Remicade for immune disorders and Concerta for attention deficit disorder, fell nearly 5 percent, to $5.71 billion. The medical device division, now J&J’s largest, did best with sales up 0.2 percent to $6.32 billion.

Meanwhile, J&J forecast earnings per share of $4.80 to $4.90 for 2011. Analysts surveyed by FactSet were expecting $4.99 a share for 2011.

For the full year, net income was up nearly 9 percent, to $13.33 billion, or $4.78 per share. Revenue totaled $61.59 billion, down from $61.9 billion in 2009, though J&J’s 2009 fiscal year had a 53rd week.