Baxter International, Inc.
) has completed the acquisition of Lund, Sweden-based
privately-owned renal products company Gambro AB for $3.9
billion, utilizing cash generated from overseas operations and
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The acquisition will enable Baxter to expand sales in developed
markets such as Europe as well as in emerging markets including
Latin America and Asia-Pacific, where the company has already
grown its peritoneal dialysis (PD) business.
Gambro is engaged in research, production and sale of dialysis
offerings. The company is a world-wide supplier of dialysis
offerings utilized in continuous renal replacement treatment and
hemodialysis. As a result, the acquisition will boost Baxter's
global leadership position in renal market and help the company
provide a comprehensive portfolio in the burgeoning dialysis
Further, the acquisition will help BAX build its core portfolio
of investigational home hemodialysis (HD) and automated PD
systems with the addition of Gambro's dialyzers, devices and
dialysis solutions, next-generation monitors, and acute therapies
to treat patients with kidney, liver and lung problems.
Baxter International, a Zacks Rank #3 (Hold) stock, reported
second-quarter adjusted (excluding one-time items) earnings per
share of $1.16, which beat the Zacks Consensus Estimate by 3
cents and surpassed the year-ago earnings by 4%. The
second-quarter result also exceeded the company's earlier stated
guidance of $1.12-$1.14.
Revenues for the quarter went up a tad 3% (up 4% at constant
exchange rate or CER) to $3,669 million, missing the Zacks
Consensus Estimate of $3,707 million. On a geographic basis,
U.S.-based revenues in the quarter improved 3%, while
international revenues rose 3% (up 4% at CER).
For the third quarter of 2013, the company expects growth in
revenues of 5% (6% at CER). Including the impact of the Gambro AB
acquisition, revenues are projected to grow 9%-12% (10%-13% at
CER) and adjusted earnings per share are expected to be in the
band of $1.18 and $1.21.
Baxter revised its forecast for 2013, which includes the impact
of Gambro acquisition. For 2013, Baxter expects reported sales
growth in the range of 8%-9% at CER compared to the earlier
projection of 10%. The company raised its adjusted earnings per
share forecast to the range of $4.62−$4.70 (earlier $4.60− $4.70)
Most of the top peers of BAX are currently performing well. They
) with a Zacks Rank #1 (Strong Buy), and
Boston Scientific Corporation
), both with a Zacks Rank #2 (Buy).