Baxter International 3Q profit rises 12 percent
NEW YORK — Specialty drug and medical device maker Baxter International Inc. said Thursday its profit grew 12 percent in the third quarter despite unfavorable currency exchange rates that held back its sales.
The Deerfield, Ill., company said sales of drugs, surgical products and medical equipment all improved and sales costs fell, helping its gross margins. Its profit grew to $530 million, or 87 cents per share, from $472 million, or 74 cents per share, a year ago.
Baxter reported $91 million in one-time charges in the third quarter. Those costs came from ending development of a drug delivery system called Solomix, and in retirement expenses connected to the Syndeo PCA syringe pump.
Excluding the items, profit grew to 98 cents per share from 88 cents per share, a penny above Wall Street expectations.
Revenue was roughly unchanged at $3.15 billion, while analysts expected $3.19 billion. BioSciences revenue rose 2 percent to $1.4 billion due to greater sales of hemophilia and antibody drug therapies, plasma treatments and biosurgery products. Medication delivery revenue grew 1 percent to $1.2 billion, although kidney product revenue fell 3 percent.
U.S. sales rose 5 percent, and international sales fell 4 percent. In constant currency, international sales grew 7 percent.
The company’s cost of sales fell by more than $100 million, to $1.51 billion, partly because of smaller after-tax charges.
Baxter raised its profit and revenue outlooks for the year. The company now forecasts a profit of $3.79 to $3.81 per share, compared with a prior forecast of $3.76 to $3.80 per share. It says revenue will be flat to up 1 percent from the $12.35 billion it reported in 2008, suggesting about $12.37 billion in revenue.
Analysts expect $3.80 per share and $12.48 billion.
Foreign currency exchange rates have become more favorable for U.S. companies as the year has gone on, but excluding their effects, Baxter says its 2009 sales will be up 7 to 8 percent.
Baxter said it expects to earn $1.02 to $1.04 per share in the fourth quarter, roughly in line with Wall Street estimates of $1.04 per share. Sales are expected to rise 8 to 10 percent, which implies $3.38 billion to $3.44 billion in revenue. Analysts expect $3.33 billion.
Baxter reported $3.13 billion in revenue in the fourth quarter of 2008. It said sales will be up 6 to 8 percent if the effects of currency exchange rates are excluded.
In premarket trading, shares of Baxter changed hands at $54.90, down 3.7 percent from Wednesday’s close at $57.
(This version CORRECTS the quarter in the lead.)
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