By Manas Mishra

(Reuters) -Johnson & Johnson on Tuesday said it could no longer provide a forecast for sales of its COVID-19 vaccine, as vaccine hesitancy in low income countries paired with already low demand in higher income nations has led to a glut of supply.

The company had earlier predicted as much as $3.5 billion in 2022 sales from the single-dose vaccine, once touted as an important tool for vaccinating hard-to-reach areas.

J&J also cut both ends of its full-year profit forecast by 25 cents and now expects to earn $10.15 to $10.35 per share. But it blamed the move on currency fluctuations rather than fundamental business issues and raised its dividend 6.6%, and shares rose about 4%.

“With the guidance cut driven exclusively by currency, I think shares are reacting to the forward looking comments,” said Edward Jones analyst Ashtyn Evans. “J&J discussed accelerating growth in medical technology through acquisitions and also the belief that supply chain issues will improve in the second half of the year.”

Other analysts said J&J remains a safe bet within the healthcare sector and that raising the dividend provided predictable income for investors despite vaccine sales woes.

The J&J shot has been hurt by links to rare but potentially deadly blood clots, manufacturing issues and concerns about efficacy. It accounts for about 3% of all doses administered in the United States, and roughly 2% of doses in Europe.

Company executives said lack of acceptance in lower income countries also was hurting vaccine sales. According to the World Health Organization, poorer countries have asked for insufficient doses to meet its goal of vaccinating at least 70% of their populations by the middle of the year.

The vaccine, which is sold at a not-for-profit price, brought in $457 million in the first quarter. J&J recorded vaccine sales of $2.39 billion last year.

Pfizer Inc has forecast $32 billion in 2022 sales from its COVID vaccine developed with BioNTech SE, while Moderna Inc has forecast $21 billion for its shot this year.

J&J said its medical devices unit should recover this year after pandemic delays in non-urgent surgeries hit sales last year, and it expects above-market growth in its large pharmaceuticals business in 2022, despite falling short of Wall Street estimates in the first quarter.

The company reported pharmaceutical sales of $12.87 billion, well shy of forecasts for $13.6 billion, due in part to low vaccine sales.

Excluding items, J&J earned $2.67 per share for the quarter, beating analysts’ expectations by 11 cents, according to Refinitiv.

(Reporting by Manas Mishra in Bengaluru, additional reporting by Michael Erman in New Jersey; Editing by Arun Koyyur and Bill Berkrot)