Baxter International Inc.
) recalled a single lot of Dianeal PD-2 peritoneal dialysis
solution with 1.5% dextrose 6000 mL (Ambu-Flex II) after
receiving reports about the presence of a particulate matter,
known as mold, resulting from a leak in the container. The news
had a negative reaction on the market as shares of the company
slid 0.5% to close at $67.57 yesterday.
Contamination of a solution with mold could lead to
life-threatening fungal peritoneal infection or sepsis upon its
intraperitoneal (IP) administration. The affected lot is C903799,
with expiration date of May 2015, product code of L5B9710, and
national drug code of 00941-0411-11.
Baxter distributed the product to dialysis centers, facilities,
distributors, and patients in the U.S. between May 2013 and Jan
2014. It was packaged in flexible plastic containers.
Baxter sent a recall letter to customers requesting them to
locate and remove the affected product from their facility. The
company also sent a recall letter to patients, who received
product from the affected lot, asking them to return it.
Baxter posted a marginal 1.1% fall in adjusted net earnings to
$692 million in the fourth quarter of 2013 from $700 million in
the year-ago quarter. However, on per share basis, adjusted net
earnings were flat at $1.26 compared with the year-ago level but
beat the Zacks Consensus Estimate by a penny.
For full year 2013, net earnings inched up 2.0% to $2,567 million
from $2,516 million a year ago. On per share basis, net earnings
rose 3.1% to $4.67 from $4.53 in 2012 and were in line with the
Zacks Consensus Estimate.
Revenues for the quarter went up 16.4% to $4,368 million globally
and exceeded the Zacks Consensus Estimate of $4,249 million.
Excluding the contribution from Gambro, revenues in the quarter
grew 5% to $4.0 billion (or 6% excluding the impact of foreign
For the first quarter of 2014, Baxter expects sales to grow
between 13 and 14%, barring the impact of foreign currency. The
company also expects adjusted earnings in the range of $1.06 to
$1.09 per share in the quarter. The current Zacks Consensus
Estimate for 2014-first quarter earnings is pegged at $1.09.
For full year 2014, BAX anticipates sales growth in the range of
9 to 10%, excluding the impact of foreign exchange. The company
also expects adjusted earnings between $5.05 and $5.25 per share
and operating cash flow of $3.5 billion for the year. The current
Zacks Consensus Estimate of $5.13 for 2014 earnings lies within
the guided range.
Currently, Baxter has a Zacks Rank #3 (Hold). Some better-ranked
stocks in the medical products industry include
). Enzymotec retains a Zacks Rank #1 (Strong Buy), while both
Covidien and Stryker carry a Zacks Rank #2 (Buy).
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