Baxter International Q2 Results Top Estimates

(RTTNews) - Healthcare company Baxter International, Inc. (BAX) reported Thursday a profit for the second quarter that declined 12 percent from last year, despite strong growth across its global franchises, hurt by lower margins and charges.

Stripping down the charges, adjusted earnings per share for the quarter topped analysts' expectations, so did quarterly sales.

Further, the company issued earnings and revenue growth forecast for the fourth quarter, and narrowed its earnings guidance range for the full-year 2014, while raising annual sales growth outlook.

''We are driving solid performance across our entire business portfolio, and advancing care across our key franchises in both developed and emerging markets," Chairman and CEO Robert Parkinson, Jr. said in a statement.

The Deerfield, Illinois-based drug maker posted net income of $520 million or $0.95 per share for the second quarter, lower than $590 million or $1.07 per share in the prior-year quarter.

The results for the latest quarter include $0.31 per share of net after-tax special items primarily for intangible amortization and costs as well as costs associated with Gambro acquisition, while the year-ago quarter included $0.13 per share of net after-tax special items.

Excluding items, adjusted net income for the quarter was $692 million or $1.26 per share, compared to $659 million or $1.20 per share in the year-ago quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $1.22 per share for the quarter. Analysts' estimates typically exclude special items.

Worldwide sales for the quarter increased 16 percent to $4.26 billion from $3.67 billion in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $4.12 billion.

Domestic sales increased 12 percent to $1.73 billion and international sales amounted to $2.53 billion, a growth of 19 percent over the same period last year. Gambro contributed $408 million to total sales.

Baxter's bioScience business generated sales of $1.75 billion, up 7 percent over last year, and medical products sales grew 24 percent to $2.51 billion from last year.

Gross margin for the quarter contracted 490 basis points to 47.9 percent from last year, and marketing and administrative expenses as a percentage of total revenues increased 60 basis points.

''This provides a strong global foundation as we continue to improve our competitive position and performance, enhance operational, commercial and scientific effectiveness, meet challenges posed by the global marketplace, and create value for patients, healthcare providers, and other key stakeholders,'' Parkinson, Jr. added.

Looking ahead to the third quarter, Baxter expects adjusted earnings in a range of $1.28 to $1.32 on a projected quarterly constant currency sales growth of about 12 to 13 percent from last year. Analysts expect the company to report earnings of $1.32 per share on quarterly revenue growth of 9.1 percent to $4.12 billion.

For fiscal 2014, the company narrowed its anticipate adjusted earnings to a range of $5.10 to $5.20 per share from the prior forecast range of $5.05 to $5.25 per share. The company also now expects annual constant sales growth of 10 to 11 percent from last year, up from the previous growth expectations of 9 to 10 percent. Street is currently looking for full-year 2014 earnings of $5.15 per share on annual revenues of $16.63 billion.

BAX closed Wednesday's regular trading session at $76.60, down $0.40 on a volume of 2.03 million shares.