DEERFIELD, Ill., April 17 Baxter InternationalInc. (NYSE: BAX) today reported solid financial results for the first quarterof 2008, and raised its financial outlook for the full year.
For the first quarter, Baxter reported net income of $429 million, a6 percent increase compared to $403 million in the first quarter of 2007.Earnings per diluted share of $0.67 increased 10 percent from $0.61 perdiluted share reported last year. These results include an after-tax chargeof $45 million, or $0.07 per diluted share, for additional costs associatedwith the company's COLLEAGUE infusion pump remediation program due to anexpected delay in recommercialization in the United States.
On an adjusted basis, Baxter's net income of $474 million increased18 percent. Adjusted earnings per diluted share of $0.74 increased 21 percentversus the prior year period and compares favorably to the guidance previouslyprovided of $0.71 to $0.73 per diluted share. This performance was the resultof improved margins due to enhanced business and product mix, improvedpricing, continued manufacturing cost improvements and favorable foreignexchange.
Baxter's worldwide sales totaled $2.9 billion in the first quarter, anincrease of 8 percent (or 2 percent excluding the impact of foreign exchange).Excluding revenues from Transfusion Therapies, a business the company divestedin the first quarter of 2007, Baxter's global sales increased 10 percent (or4 percent excluding foreign exchange) versus the prior year.
In Baxter's BioScience business, positive momentum continued in the firstquarter with revenues totaling $1.2 billion, an increase of 13 percent,reflecting strong double-digit sales growth across all product categories.Driving this performance was robust growth from several products used for thetreatment of hemophilia and immune disorders, including ADVATE [AntihemophilicFactor (Recombinant), Plasma/Albumin-Free Method (rAHF-PFM)] and immuneglobulin intravenous (IGIV), as well as solid growth from other plasma-basedtherapies, biosurgery products and vaccines.
Medication Delivery sales grew 8 percent in the quarter to $1.1 billion,with strong global sales of intravenous and nutritional therapies, andsignificant growth in international sales of anesthesia products andinjectable drugs. Renal sales increased 6 percent to $558 million.
Baxter's investment in research and development of $190 million increased19 percent in the first quarter as the company continues to advance itsproduct pipeline across its business portfolio.
"Our strong and improving financial position reflects the continuingmomentum in our business," said Robert L. Parkinson, Jr., chairman and chiefexecutive officer. "Our favorable outlook for the full year allows us tocontinue to accelerate our investments in research and development programsthat will improve treatment for patients, expand access to care and enhancethe quality of life for people around the world."
Since the beginning of the year, Baxter has achieved a number ofcommercial, clinical and regulatory milestones, including:
Second Quarter and Full-Year 2008 Outlook
Baxter also announced today that it is raising its earnings outlook forfull-year 2008. The company continues to expect sales growth, excluding theimpact of foreign exchange, of 5 to 6 percent. Excluding TransfusionTherapies from both 2007 and 2008 and excluding foreign exchange, the companyexpects sales growth of approximately 6 to 7 percent. Baxter now expects toachieve earnings per diluted share of $3.18 to $3.24, before any specialitems, and cash flow from operations of approximately $2.6 billion.Previously, the company had provided earnings guidance of $3.10 to $3.18 perdiluted share, excluding special items, and expected to generate cash flowfrom operations of more than $2.5 billion.
For the second quarter of 2008,