Baxter Finds Trouble In Brazil; Restatements Due; 2 Execs Fired; Loss Posted In Quarter

Already under fire from Wall Street, Baxter International Inc. again jarred investors Thursday, saying it would restate more than three years of financial results and fire two executives because of accounting irregularities. The disclosure, combined with a disappointing profit report, sent Baxter shares tumbling nearly 5 percent Thursday. To correct its books, Baxter will reduce net income by $40 million from 2001 through the first quarter of 2004. Meanwhile, sales will be cut by as much as $70 million. In a conference call with analysts, Baxter blamed its accounting troubles on its Brazilian operations, which generate $100 million a year in sales for the Deerfield-based medical products giant. Although Baxter executives say they believe the problems are limited to Brazil, they cast another unflattering light on management and its financial controls--issues that led former Baxter Chief Executive Harry Kraemer in January to announce his resignation.