DOW JONES NEWSWIRES
Baxter International Inc. (BAX) posted a 20% jump in
first-quarter net income, as sales of therapies used to treat
immune-system deficiencies and a year-ago charge helped offset the
impact of the stronger dollar and the recession.
The medical-products maker has benefited from a broad product
lineup that helps offset spending cutbacks by hospitals and
patients but continues to be plagued by problems with its Colleague
infusion pumps, though it said in March new woes wouldn't affect
financial results.
Net income rose to $518 million, or 83 cents a share, from $432
million, or 67 cents a share, a year earlier. The year-ago period
included a 7-cent charge for infusion pump-related problems. The
company in January projected earnings of 80 cents to 82 cents.
Net sales dropped 1.8% to $2.82 billion, but rose 6% excluding
currency fluctuations. Baxter had projected a 7% boost on that
basis.
International sales fell 7%, but rose 7% excluding
foreign-exchange impacts. U.S. sales increased 5% - a noteworthy
achievement as the recession generally hampers domestic business
growth.
Gross margin rose to 52.7% from 48%.
Baxter's therapies target people with life-threatening
conditions such as cancer, immune disorders and trauma. Bioscience
- Baxter's largest unit - posted a 3% sales rise, helped by
double-digit growth across several product categories.
Baxter first pulled its Colleague intravenous fluid pumps in
2005, amid a host of problems and effects linked to some deaths.
But it won't recall the pumps despite newly found problems, saying
they will be fixed in the field. The devices are on sale
internationally but remain off the large U.S. market.
Looking ahead, Baxter raised the low end of its 2009 earnings
outlook by 2 cents to $3.72 to $3.78 a share while reiterating its
sales view. It also projected second-quarter earnings of 93 cents
to 95 cents on sales falling in the low-single digits on a
percentage basis. Analysts projected a 95-cent profit and revenue
down 2% to $3.13 billion.
Shares closed at $49.25 on Wednesday and didn't trade premarket.
The stock has lost nearly 20% of its value in the past two
months.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com