By RTT News, October 17, 2013, 08:36:00 AM EDT
(RTTNews.com) - Healthcare company Baxter International, Inc. ( BAX ) reported Thursday a profit for the third quarter that declined seven percent from last year, despite sales growth, hurt by lower margins and acquisition related charges.
Stripping down the charges, adjusted earnings per share for the quarter matched analysts' expectations, while quarterly revenues missed their estimates.
Further, the company issued earnings and revenue growth forecast for the fourth quarter, and confirmed its earnings guidance for the full-year 2013.
The company noted that it further boosted its dialysis product portfolio with the acquisition of privately-held Swedish medical-equipment maker Gambro AB, and continued to advance its new product pipeline by launching new products, achieving multiple regulatory milestones, and establishing new collaborations.
The company completed its 26.5 billion Swedish krona or $4 billion, acquisition of Gambro on September 6. The deal was agreed upon in early December 2012.
The Deerfield, Illinois-based drug maker posted net income of $544 million or $0.99 per share for the third quarter, lower than $583 million or $1.06 per share in the prior-year quarter.
The results for the latest quarter include $0.20 per share of costs associated with Gambro acquisition, litigation reserves and collaboration payments, while the year-ago quarter included $0.08 per share of costs.
Excluding items, adjusted net income for the quarter was $655 million or $1.19 per share, compared to $628 million or $1.14 per share in the year-ago quarter.
On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $1.19 per share for the quarter. Analysts' estimates typically exclude special items.
Worldwide sales for the quarter increased 9 percent to $3.77 billion from $3.48 billion in the same quarter last year, but missed fifteen Wall Street analysts' consensus estimate of $3.81 billion by a whisker.
Domestic sales increased 9 percent to $1.64 billion and international sales amounted to $2.13 billion, a growth of 9 percent over the same period last year. Gambro contributed $100 million to total revenues.
Baxter's bioScience business generated sales of $1.62 billion, up 6 percent over last year, and medical products sales grew 10 percent to $2.15 billion from last year.
Gross margin for the quarter contracted 50 basis points to 51.6 percent from last year, and marketing and administrative expenses as a percentage of total revenues increased 470 basis points.
''Our global presence and diversified healthcare model, together with the advancements we've made to our business portfolio and new product pipeline are focused on driving improved access to care, better outcomes for patients and enhanced value for our shareholders,'' Chairman and CEO Robert Parkinson, Jr. said in a statement.
Looking ahead to the fourth quarter, Baxter expects adjusted earnings in a range of $1.24 to $1.26 on a projected quarterly constant currency sales growth of about 14 to 15 percent from last year. Analysts expect the company to report earnings of $1.26 per share on quarterly revenues of $4.31 billion.
For fiscal 2013, the company continues to anticipate adjusted earnings in a range of $4.65 to $4.67 per share on expected annual constant sales growth of about 7 percent from last year. Street is currently looking for full-year 2013 earnings of $4.67 per share on annual revenues of $15.24 billion.
The revenue guidance includes anticipated Gambro contribution of about $400 million in the fourth quarter and $500 million for the full year.
BAX closed Wednesday's regular trading session at $67.56, up $1.20 on a volume of 3.85 million shares. In the past 52-week period, the stock has been trading in a range of $60.81 to $74.60.
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