Baxter International Inc. (BAX) posted a stronger-than-expected
7.9% rise in second-quarter profit on higher margins but sales
unexpectedly fell as currency impacts masked solid product
growth.
The medical-products maker also boosted its 2009 earnings
forecast to $3.76 to $3.80 a share from April's narrowed $3.72 to
$3.78 a share. It still expects sales to be flat for the year amid
currency impacts and projected third-quarter earnings of 95 cents
to 97 cents, bracketing analysts' expectations.
Baxter's therapies target serious diseases that can't be ignored
- such as cancer, immune disorders and trauma - insulating the
company somewhat from the economy's woes. But lately investors have
been closely watching Baxter's largest unit, bioscience, amid fears
a recession-induced rise in plasma collections - people in the U.S.
people collect a small fee for donations - will cause a glut that
crushes prices.
Baxter reported a second-quarter profit of $587 million, or 96
cents a share, up from $544 million, or 85 cents a share, a year
earlier. The company in April projected 93 cents to 95 cents.
Gross margin rose to 52.4% from 51%.
Net sales dropped 2.1% to $3.12 billion, but rose 8% excluding
currency fluctuations. Analysts surveyed by Thomson Reuters, on
average, predicted $3.19 billion. International sales fell 8%, but
rose 9% excluding currency impacts. U.S. sales rose 7%.
Bioscience posted a 2% sales rise, or 13% minus foreign
exchange, helped by strong results for antibody therapies and other
specialty plasma therapeutics. Medication-delivery sales fell 3%,
but rose 8% excluding currency impacts.
Shares closed Wednesday at $53.09 and were inactive
premarket.
-By Mike Barris, Dow Jones Newswires; 201-416-2330;
mike.barris@dowjones.com