Baxter Reports Second Quarter Financial Results in Line with Guidance
Company Confirms Full-Year 2012 Outlook
<0> Baxter International Inc.Deborah Spak, (224) 948-2349orMary Kay Ladone, (224) 948-3371Clare Trachtman, (224) 948-3085 </0>
Baxter International Inc. (NYSE:BAX) today announced financial results for the second quarter and confirmed its full-year 2012 financial outlook.
Baxter reported net income of $661 million in the second quarter, an increase of 7 percent compared to $615 million reported in the same period last year. Earnings per diluted share of $1.19 advanced 11 percent from $1.07 per diluted share in the prior-year period. These results included a net after-tax benefit from special items totaling $42 million of income (or $0.07 per diluted share), for costs and adjustments related to recent business development transactions and certain financial reserves. Specifically, the company recorded a special after-tax charge totaling $23 million (or $0.04 per diluted share) related to a global collaboration with Chatham Therapeutics, LLC (Chatham) for the development and commercialization of potential treatments for hemophilia B using Chatham’s recombinant gene therapy technology. This charge was more than offset by a net after-tax gain of $65 million (or $0.11 per diluted share) resulting primarily from adjustments to both the company’s COLLEAGUE infusion pump reserves and estimated milestone payments associated with the 2010 acquisition of ApaTech Limited, an orthobiologic products company.
On an adjusted basis, excluding special items, Baxter’s second quarter net income of $619 million increased 1 percent from $615 million reported in 2011. Adjusted earnings per diluted share of $1.12 rose 5 percent from $1.07 per diluted share last year, and was within the range of the company’s previously issued earnings guidance of $1.10 to $1.12 per diluted share.
Worldwide sales totaled $3.6 billion and increased 1 percent from year-ago levels. Excluding the impact of foreign currency, worldwide sales increased 4 percent. Sales within the United States advanced 6 percent to $1.5 billion, while international sales of $2.1 billion declined 2 percent. Excluding foreign currency, international sales increased 3 percent.
BioScience revenues of $1.6 billion increased 1 percent from the prior-year period. Excluding the impact of foreign currency, BioScience sales rose 4 percent driven primarily by improved demand, particularly in the United States, for ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] for the treatment of hemophilia, and strong growth from select specialty plasma-based therapeutics and the company’s portfolio of surgical sealants. Also contributing to this performance was the benefit of the Synovis Life Technologies, Inc. (Synovis) acquisition, which was completed during the first quarter of 2012.
Medical Products sales of $2.0 billion also increased 1 percent from the prior-year period, and excluding the impact of foreign currency, sales rose 4 percent. This performance was driven primarily by solid gains in peritoneal dialysis patients, growth of certain injectable and nutritional therapies, as well as the impact from the company’s acquisition of Baxa Corporation.
For the first six months of 2012, Baxter reported net income of $1.2 billion, or $2.24 per diluted share, reflecting a 9 percent increase from last year on a per-share basis. Excluding special items, Baxter’s adjusted net income for the six-month period was nearly $1.2 billion and earnings per diluted share of $2.13 increased 4 percent from $2.05 per diluted share reported in the comparable prior-year period.
Baxter’s worldwide sales for the six-month period totaled $7.0 billion and increased 2 percent, and excluding foreign currency, sales increased 4 percent. BioScience sales of more than $3.0 billion grew 2 percent (or 5 percent excluding foreign currency), and Medical Products sales of $4.0 billion also increased 2 percent (or 4 percent excluding foreign currency).
During the first half of 2012, Baxter generated strong cash flows from operations of approximately $1.4 billion and returned significant value to shareholders. On a year-to-date basis, Baxter has returned over $1.3 billion to shareholders through dividends totaling $374 million and share repurchases of $960 million (or approximately 17 million shares).
''We remain confident that the focus on our diversified portfolio of critical therapies and innovation will position us well for future growth,'' said Robert L. Parkinson, Jr., chairman and chief executive officer. ''We will continue to invest in our new product pipeline and seek complementary business development opportunities that will enhance our global presence, expand access to care, and create long-term value for our shareholders.''
Baxter continued to enhance its portfolio and new product pipeline through investments in research and development and business development initiatives. Recent achievements include the following:
Baxter also announced today its guidance for the third quarter and confirmed its financial outlook for full-year 2012.
For the third quarter of 2012, Baxter expects sales growth, excluding the impact of foreign currency, of 5 to 6 percent (or approximately 1 percent including the impact of foreign exchange), and earnings per diluted share of $1.12 to $1.14, before any special items.
For full-year 2012, Baxter continues to expect sales growth, excluding the impact of foreign exchange, of 4 to 5 percent (or approximately 2 percent including the impact of foreign exchange). In addition, the company expects earnings of $4.50 to $4.56 per diluted share, before any special items, and cash flows from operations to exceed $3.0 billion.
A webcast of Baxter's second quarter conference call for investors can be accessed live from a link on the company's website at beginning at 7:30 a.m. CDT on July 19, 2012. Please visit Baxter's website for more information regarding this and future investor events and webcasts, including the company’s Investor Conference to be held October 9, 2012.
Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.