Baxter International Inc. (NYSE:BAX) today reported solid financial results for the third quarter of 2009, and provided its fourth quarter and updated full-year 2009 financial outlook.
Net income grew 12 percent to $530 million from $472 million reported in the third quarter of 2008. Earnings per diluted share of $0.87 advanced 18 percent from $0.74 per diluted share reported in the prior-year period. The third quarter results include after-tax special charges totaling $69 million (or $0.11 per diluted share) primarily for fixed asset write-offs related to the discontinuation of the company’s SOLOMIX drug delivery system in development, and planned retirement costs associated with the SYNDEO PCA Syringe Pump. The company recorded after-tax special charges in the third quarter of 2008 totaling $91 million (or $0.14 per diluted share).
On an adjusted basis, excluding special charges in both years, Baxter’s net income of $599 million increased 6 percent in the third quarter from $563 million reported in the third quarter last year. Adjusted earnings per diluted share of $0.98 increased 11 percent from $0.88 per diluted share reported in the prior-year period, and compares favorably with the guidance the company previously provided of $0.95 to $0.97 per diluted share. This financial performance was the result of continued margin expansion, expense leverage and benefits derived from the company’s ongoing share repurchase program.
Baxter’s global sales of $3.1 billion were flat compared to the third quarter last year. Excluding the impact of foreign currency, Baxter’s worldwide sales increased 6 percent. Sales within the United States increased 5 percent to $1.3 billion in the third quarter, while international sales declined 4 percent to $1.8 billion. Excluding the impact of foreign currency, Baxter’s international sales grew 7 percent.
Medication Delivery sales of $1.2 billion increased 1 percent (and excluding foreign currency increased 7 percent). Renal sales of $576 million declined 3 percent (and excluding foreign currency increased 4 percent). Contributing to these results was growth across multiple product categories, including products used in peritoneal dialysis (PD) treatment, intravenous therapies, injectable drugs and anesthesia products.
BioScience revenues totaled $1.4 billion in the third quarter, which represents a 2 percent increase over the prior-year period. Excluding foreign currency, BioScience sales advanced 8 percent, reflecting gains across several core franchises. Key drivers of sales performance include continued growth of recombinant therapies, including ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] for the treatment of hemophilia, antibody therapies and several specialty plasma therapeutics, as well as biosurgery products.
“We continue to leverage the benefits derived from our diversified healthcare model to achieve solid financial performance, despite a challenging global macro-economic environment,” said Robert L. Parkinson, Jr., chairman and chief executive officer. “Given our strong financial position, geographic presence, and the medically-necessary nature of Baxter’s products, Baxter is well-positioned to capitalize on opportunities across a broad array of therapeutic areas.”
Nine-Month Results
For the first nine months of 2009, Baxter’s net income totaled $1.6 billion, an increase of 13 percent. Earnings per diluted share of $2.66 advanced 18 percent over $2.26 per diluted share reported in the prior-year period. On an adjusted basis, excluding special items from both years, Baxter’s net income of $1.7 billion increased 8 percent over $1.6 billion reported for the same period last year. Adjusted earnings per diluted share for the nine-month period increased 12 percent to $2.77 per diluted share, from $2.47 per diluted share reported in 2008.
Baxter’s global sales in the first nine months of the year totaled $9.1 billion, and declined 1 percent from $9.2 billion reported in the prior-year period. Excluding the impact of foreign currency, sales growth for the first nine months of 2009 was 7 percent. Sales within the United States totaled $3.9 billion, an increase of 6 percent over the same period last year, while international sales declined 6 percent to $5.2 billion. Excluding the impact of foreign currency, Baxter’s international sales grew 8 percent.
Recent Highlights
Baxter has achieved a number of scientific and commercial milestones over the last several months, including: