Baxter International 4Q Net Up 19%; Co Sees 1Q Operating EPS 80 Cents-82 Cents

   DOW JONES NEWSWIRES 
 

Baxter International Inc. (BAX) posted a 19% jump in fourth-quarter net income, helped by sales of therapies used to treat immune-system deficiencies and hemophilia.

The medical-products maker also gave first-quarter and 2009 revenue forecasts that exceeded Wall Street's outlook, while the first-quarter earnings view slightly misses analysts' expectations.

Baxter said net income rose to $569 million, or 91 cents a share, from $478 million, or 74 cents a share, a year earlier. Excluding a $5 million charge for acquisition-related costs, earnings rose to 91 cents a share from 76 cents a share, above Baxter's October forecast of 88 cents to 90 cents a share.

Net sales rose 4% to $3.1 billion, or 9% excluding the impact of the stronger dollar. In October, Baxter forecast sales growth, excluding currency impacts, of about 7%.

Gross margin rose to 51.2% from 49.4%.

Baxter has benefited in the past from a broad lineup of "medically necessary" products and a global presence that shields it somewhat from spending cutbacks by hospitals and patients during the recession. But its weak first-quarter and muted 2009 outlook indicate that the recession is beginning to take a toll even on strong companies.

"Despite a challenging, global macro-environment, we're very well-positioned to continue to meet our commitments," said Chairman and Chief Executive Robert L. Parkinson.

Baxter's therapies target people with life-threatening conditions such as cancer, immune disorders and trauma. Its biopharmaceuticals, vaccines, biosurgery products and transfusion therapies are used by health-care providers in more than 100 countries.

Bioscience - Baxter's largest unit - posted a 12% sales rise, helped by growth in all its product categories. Excluding currency impacts, the increase was 17%.

Looking ahead, Baxter predicts 2009 earnings, excluding items, of $3.70 to $3.78 a share on 7% sales growth, excluding foreign-currency impacts. Including the stronger dollar's impact, sales growth will be flat, Baxter said. Wall Street was expecting $3.74 a share on a 2% rise in revenue to $12.66 billion.

For the first quarter, Baxter expects earnings per share of 80 to 82 cents, excluding items; analysts forecast 83 cents. The company also projected revenue growth of 7% excluding foreign currency, compared with analysts' expectations for 2% growth.

Baxter shares closed at $55.47 on Wednesday and didn't trade premarket.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; [e-mail]

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