By Dow Jones Business News,
July 17, 2014, 08:35:00 AM EDT
Baxter International Inc. ( BAX ) said its second-quarter earnings fell 12% as higher costs and expenses offset a strong
gain in revenue, which beat expectations.
The company's per-share earnings also surpassed expectations.
Baxter narrowed its earnings guidance range for the full year. It now expects per-share earnings between $5.10 and $
5.20 on sales growth of between 10% and 11%. It had previously expected earnings between $5.05 and $5.25 a share on
sales growth of 9% to 10%.
Baxter in March said it would spin off its biopharmaceuticals operations into an independent company next year. More
than half of the drug unit's approximately $6 billion in revenue last year came from its treatments for hemophilia, a
rare bleeding disorder.
The company in July said it had acquired AesRx LLC, a private biopharmaceutical company focused on orphan drug
targets, including a an investigational treatment for sickle cell disease.
In the latest period, Baxter's bioscience business reported revenue rose 6.9% to $1.75 billion.
Baxter overall reported a profit of $520 million, or 95 cents a share, down from $590 million, or $1.07 a share, a
year earlier. The quarter's results included net after-tax special items totaling $172 million, related to costs
associated with product development milestone payments, integration of the company's 2013 acquisition of Gambro AB, and
Baxter's planned separation into two independent healthcare companies, among other factors.
Excluding these and other items, adjusted earnings rose to $1.26 a share from $1.20. Revenue jumped 16% to $4.26
The company had expected per-share earnings of $1.18 to $1.22. Baxter also projected sales growth of 12% to 13%,
excluding the impact of foreign exchange.
Medical product sales climbed 24% to $2.51 billion.
Gross margin declined to 47.9% from 52.8%.
For the current quarter, the company expects per-share earnings of $1.28 to $1.32 on revenue growth of 12% to 13%,
compared to analysts' expectations for per-share earnings of $1.32 on 9% revenue growth.
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