Baxter's profit jumps 19 percent on therapy, device sales
Baxter International Inc.'s third-quarter profit jumped 19 percent on a mix of higher sales from its blood and immune disorder treatments, drug delivery devices and kidney dialysis treatments.
The quarterly performance beat Wall Street expectations, and Deerfield-based Baxter raised its full-year outlook.
"Our company continues to benefit from the power of our diversified health care model, with each of the businesses and regions making significant contributions," Chief Executive Bob Parkinson said during a company earnings call.
The company said it earned $472 million, or 74 cents per share, compared with profit of $395 million, or 61 cents per share, during the same period a year earlier. Revenue rose 15 percent to $3.15 billion from $2.75 billion.
Baxter says it earned 88 cents per share after excluding charges for the discontinuation of its Clearshot prefilled syringe program, issues with its Colleague infusion pump and collaboration costs.
Analysts polled by Thomson Financial expected profit of 82 cents per share on revenue of $3.07 billion.
The Colleague intravenous pumps were recalled in 2005 because of manufacturing issues.
During the quarter, sales from the bioscience unit rose 17 percent to $1.35 billion, driven by sales of protein therapies used to treat bleeding and immune-system disorders. Meanwhile, sales for the drug delivery unit rose 10 percent to $1.16 billion while dialysis treatments sales rose 7 percent to $593 million.
Strong sales overseas helped boost each unit, the company said.
Goldman Sachs analyst Lawrence Keusch said bioscience sales were $53 million above his expectations and drug delivery sales were $17 million better than expected.
"We continue to view Baxter as well positioned in the current environment," Keusch wrote in a note to investors.
Company shares have been virtually immune to the current economic downturn, up more than six percent from last year.
Analysts say Baxter owes its resilience to a diversified business model based on simple, lifesaving products that are used by hospitals everyday.
"The products they offer aren't high-tech things that might be optional or deferrable," said Aaron Vaughn, an analyst with Edward Jones. "They are health care staples that people need to maintain their level of health."
Baxter on Wednesday raised its full-year profit outlook and set fourth-quarter guidance.
For the full year, the company now expects profit of $3.35 to $3.37 per share instead of $3.18 to $3.24 per share. Sales are expected to rise between 5 percent and 6 percent, implying a range of $11.83 billion to $11.94 billion. In 2007, the company had revenue of just over $11.26 billion.
Analysts expect full-year profit of $3.30 per share on revenue of $12.42 billion.
The company expects fourth-quarter profit between 88 cents and 90 cents per share on a 7 percent boost in sales. That implies sales of about $2.94 billion compared with $2.75 billion during the same period a year prior.
Baxter's outlook excludes charges and the impact of foreign currency exchange rates.
Meanwhile, Analysts polled by Thomson Financial expect fourth-quarter profit of 90 cents per share on revenue of $3.28 billion.
Shares of Baxter fell $1.57, or 2.7 percent, Wednesday to $57 in morning trading.