Baxter International Inc. (Baxter), a US-based medical device company, has reported net sales of $2.8 billion for the first quarter of 2009, down 2%, compared with the net sales $2.9 billion in the year-ago quarter. It has also reported a net income of $516 million, or $0.83 per diluted share, for the first quarter of 2009, up 20%, compared with the net income of $429 million, or $0.67 per diluted share, in the year-ago quarter.
On an adjusted basis, excluding 2008 special items, Baxter’s first quarter net income increased 9% to $516 million from $474 million reported in the prior-year period, and earnings per diluted share increased 12% to $0.83 from $0.74 per diluted share reported in the first quarter of 2008.
Excluding the impact of foreign currency, worldwide sales increased 6%. Sales within the US increased 5% to $1.2 billion, while international sales declined 7% to $1.6 billion. Excluding the impact of foreign currency, Baxter’s international sales grew 7%.
In the first quarter, Medication Delivery sales of $1.0 billion declined 3% (and excluding foreign currency increased 6%). Renal sales of $515 million declined
8% (and excluding foreign currency increased 1%). These results were driven by growth across core components of these portfolios, including the peritoneal dialysis (PD) franchise, anesthesia products, intravenous therapies and global injectables.
Fundamentals continue to be strong in Baxter’s BioScience business. In the first quarter, BioScience revenues totaled $1.3 billion and increased 3%. Excluding foreign currency, BioScience sales advanced 11%, reflecting strong double-digit gains across multiple product categories. Key drivers of this performance include notable growth from antibody therapy and plasma-protein products across the globe, continued conversion to ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] for the treatment of hemophilia, and strong sales of biosurgery products.
“Despite the challenging, global macro-economic environment, our first quarter financial results underscore the value of our diversified healthcare model, the solid fundamentals underpinning our portfolio, and our disciplined focus on driving margin improvement,” said Robert L. Parkinson, Jr., chairman and chief executive officer. “We continue to believe that we are very well-positioned given our broad geographic reach and the medically-necessary nature of our portfolio to expand access to care, improve treatments and enhance the quality of life for patients around the world.”
Second Quarter and Full-Year 2009 Outlook
Baxter also announced today its guidance for the second quarter 2009 and provided updated guidance for the full year.
For the second quarter of 2009, Baxter expects sales growth, excluding the impact of foreign currency, of around 7%. Based on current foreign exchange rates, the company expects reported sales (including the impact of foreign exchange) to decline in low single digits when compared to sales in the second quarter of 2008. The company also expects earnings per diluted share for the second quarter of $0.93 to $0.95, before any special items.
For the full year, Baxter expects sales growth, excluding the impact of foreign currency, of around 7%. Based on current foreign exchange rates, Baxter expects reported sales growth to be around flat. In addition, the company now expects earnings per diluted share of $3.72 to $3.78, before any special items, and continues to expect cash flow from operations to total more than $2.6 billion.
“Our 2009 guidance reflects the ongoing operational strength of our businesses and our ability to deliver sustainable growth,” concluded Robert M. Davis, chief financial officer. “Although we continue to operate in a volatile and challenging macro-environment which continues to evolve, we remain focused on delivering to our objectives while making appropriate investments for the future.”