DEERFIELD, Ill., July 17 /PRNewswire-FirstCall/ -- Baxter International Inc. today posted strong financial results for the second quarter of 2008 and raised its full-year financial outlook.
For the second quarter, Baxter reported net income of $544 million and earnings per diluted share of $0.85, which compared favorably to the company’s earnings guidance of $0.81 to $0.83 per diluted share. Net income increased 26 percent compared to $431 million reported in the second quarter of 2007, and earnings per diluted share increased 31 percent from $0.65 per diluted share reported last year. 2007 results include an after-tax restructuring charge of $46 million or $0.07 per diluted share. On an adjusted basis, net income and earnings per diluted share increased 14 percent and 18 percent, respectively, compared to the prior year period.
The company’s strong financial performance can be attributed to continued gross margin expansion as a result of enhanced business, product and geographic mix, favorable pricing across multiple businesses and manufacturing efficiencies.
“Our positive financial performance in the first half of 2008 continues to reflect the strength of our diversified business model, and positions us well in this uncertain global economy,” said Robert L. Parkinson, Jr., chairman and chief executive officer.
Baxter’s worldwide sales totaled $3.2 billion in the second quarter, an increase of 13 percent (or 5 percent excluding the impact of foreign exchange). Positive momentum continued in Baxter’s BioScience business in the second quarter, with revenues totaling approximately $1.4 billion, an increase of 16 percent. Double-digit growth across the portfolio was the result of robust sales of plasma-based therapies, products used for the treatment of hemophilia and immune disorders, biosurgery products and strong demand for the company’s encephalitis vaccine.
Medication Delivery sales grew 12 percent in the quarter to approximately $1.2 billion, driven by strong international sales of IV therapy products and injectable drugs, as well as anesthesia products globally. Renal sales increased 8 percent to approximately $600 million as a result of an increase in peritoneal dialysis patients in many markets around the world.
The company continues to advance its product pipeline across its business portfolio. Investments in research and development in the quarter totaled $222 million, reflecting an increase of 25 percent over the prior-year period.
Six-Month Results
For the first six months of 2008, Baxter’s net income totaled $973 million and increased 17 percent, with earnings per diluted share increasing 21 percent to $1.52. On an adjusted basis, Baxter’s net income of $1.0 billion increased 16 percent from $880 million last year. Adjusted earnings per diluted share for the six-month period of $1.59 increased 20 percent, from $1.33 per diluted share in the prior year period.
Baxter’s worldwide sales grew 10 percent in the first half of the year to $6.1 billion, an increase from $5.5 billion last year. Excluding the impact of foreign exchange, sales growth for the first six months of the year was 3 percent. Sales within the United States totaled $2.4 billion, an increase of 4 percent over the same period last year, and international sales grew 15 percent (or 3 percent excluding the impact of foreign exchange) to $3.6 billion.
Third Quarter and Full-Year 2008 Outlook
As a result of the strong performance in the first half of the year, Baxter is raising its financial outlook for full-year 2008. The company expects sales growth for the year, excluding the impact of foreign exchange, of 5 to 6 percent, with earnings per diluted share of $3.28 to $3.32, before any special items. This compares to the company’s previous earnings guidance of $3.18 to $3.24. In addition, the company expects cash flow from operations of at least $2.6 billion.
For the third quarter of 2008, Baxter expects sales growth of 6 to 8 percent, excluding the impact of foreign exchange, and earnings per diluted share, before any special items, of $0.81 to $0.83.
A webcast of Baxter’s second quarter conference call for investors can be accessed live from a link on the company’s website at www.baxter.com beginning at 7:30 a.m. CDT on July 17, 2008. Please visit Baxter’s website for more information regarding this and future investor events and webcasts, including investor presentations.
Baxter International Inc. develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.
This release includes forward-looking statements concerning the company’s financial results. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: demand for and market acceptance risks for new and existing products, such as ADVATE, and other technologies; future actions of regulatory bodies and other governmental authorities, including the FDA and foreign counterparts, that could delay, limit or suspend product development, manufacturing or sales or result in sanctions; product quality or patient safety concerns leading to product recalls, withdrawals, launch delays, litigation, or declining sales; product development risks; inventory reductions or fluctuations in buying patterns by wholesalers or distributors; the impact of geographic and product mix on the company’s sales; the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies; reimbursement policies of government agencies and private payers; the availability of acceptable raw materials and component supply; the ability to enforce company patents; patents of third parties preventing or restricting the company’s manufacture, sale or use of affected products or technology; foreign currency fluctuations and other risks identified in the company’s most recent filing on Form 10-K and other Securities and Exchange Commission filings, all of which are available on the company’s website. The company does not undertake to update its forward-looking statements. Financial schedules are attached to this release and available on the company’s website.
CONTACT: Media, Deborah Spak, +1-847-948-2349, Investors, Mary Kay Ladone,
+1-847-948-3371, or Clare Trachtman, +1-847-948-3085, all of Baxter
International Inc.
Web site: http://www.baxter.com//
