Baxter 4Q results exceed company's expectations
Business Wire
DEERFIELD - Baxter International reported results for the fourth quarter of 2015 that exceeded the company's previously issued guidance.
Baxter reported income from continuing operations of $190 million, or 34 cents per diluted share, on a GAAP (Generally Accepted Accounting Principles) basis. These results included net after-tax special items totaling $46 million (or 9 cents per diluted share) primarily related to costs associated with the company's July 1, 2015 spin off of Baxalta Inc., business optimization initiatives, intangible asset amortization and Gambro AB integration efforts. These costs were partially offset by certain business development and product related items.
On an adjusted basis, excluding special items, Baxter's fourth quarter income from continuing operations totaled $236 million, or 43 cents per diluted share, exceeding the company's previous guidance of 30 to 32 cents per diluted share.
Worldwide sales totaled $2.6 billion, an increase of 2 percent on a constant currency basis as compared to the prior year period, and also exceeded the company's previously issued guidance.
On a reported basis, sales declined 7 points as foreign exchange negatively impacted sales by nine percentage points in the quarter. Sales within the United States increased 1 percent to $1.1 billion, while international sales totaled $1.5 billion, representing a 2 percent increase on a constant currency basis, and a 12 percent decline on a reported basis. Adjusting for the impact of foreign exchange and a generic market entrant in the United States for the company's oncology injectable, cyclophosphamide, Baxter's global sales rose 4 percent in the fourth quarter.
By business, Hospital Products sales of $1.6 billion increased 2 percent on a constant currency basis and declined 5 percent on a reported basis. Adjusting for the impact of foreign exchange and U.S. cyclophosphamide, Hospital Products sales advanced 5 percent from the prior year period. Hospital Products performance in the quarter benefited from strong sales of infusion systems and IV solutions in the United States, as well as increased demand for the company's parenteral nutrition products and injectable drug compounding services.
Baxter's Renal Products sales totaled $984 million, representing a 1 percent increase on a constant currency basis, and a 9 percent decline on a reported basis. Sales growth in the quarter benefited from increased demand for peritoneal dialysis products and continuous renal replacement therapies.
''Our fourth quarter performance clearly reflects the positive impact of our initial post-spin margin expansion programs, and we continue to build upon the momentum that has been established across the organization,'' said José E. Almeida, chairman and chief executive officer. ''Going forward, I see continued opportunity to deliver improved performance through optimization of the portfolio, enhanced operational excellence and disciplined execution of our capital allocation initiatives, including the successful disposition of our retained Baxalta equity stake.''
Summary of Full-Year 2015 Results
Baxter's GAAP income from continuing operations totaled $400 million, or $0.73 per diluted share, in 2015. Excluding special items and discontinued operations, Baxter's adjusted income from continuing operations totaled $755 million, and adjusted earnings per diluted share were $1.38.
Baxter's worldwide revenues in 2015 totaled $10 billion and declined 7 percent. Adjusting for the impact of foreign exchange and U.S. cyclophosphamide sales, Baxter's revenues increased 3 percent. Sales within the United States totaled $4 billion, while international sales totaled $6 billion.
By business, sales within Hospital Products totaled $6.2 billion, a decline of 6 percent on a reported basis. Adjusting for the impact of foreign exchange and U.S. cyclophosphamide, Hospital Products sales rose 5 percent from the prior year period. Baxter's Renal Products sales totaled $3.8 billion, and increased 1 percent after adjusting sales for a 10 percentage point negative impact from foreign exchange.