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Carly Helfand/MEDILL

Growth in both Baxter's bioscience and medical equipment segments propelled its fourth-quarter net income 9 percent higher than the year-ago period.

Baxter delivers clean bill of health despite anemic economy

by Carly Helfand
Jan 26, 2012

Helped by stable U.S. growth and expansion into emerging markets, Baxter International Inc., reported strong fourth-quarter earnings that met analyst expectations.

In the quarter ended Dec. 31, net income for the health-care company, which develops and manufactures products to treat conditions such as hemophilia, kidney disease and immune disorders, climbed to $463 million, or 82 cents per diluted share, up 9 percent from $423 million, or 72 cents per diluted share, in the year-ago period.

Baxter’s net income in the final quarter of 2011 was affected by higher marketing and administrative expenses related to resolution of a lawsuit. Other factors weighing on results included investments in improving operating efficiency and a contribution to the Baxter International Foundation, the company’s philanthropic arm whose mission is to increase access to health care globally.

“There were a number of charges in there that were devoted toward actions to continue to make the company more efficient and right-size the business for the current environment,” said analyst Lawrence Keusch of Morgan Keegan & Co. Inc. “We’re seeing all the companies out there being pretty fluid and dynamic as they react to the global business environment.”

Excluding one-time charges, Baxter would have earned $1.17 per diluted share, up from $1.11 per diluted share in the fourth quarter of 2010. These numbers exactly matched the average estimate forecasted by analysts in a poll by Yahoo! Finance.

“2011 was a very successful year for Baxter as we continue to fulfill our mission of providing innovative life-saving and life-sustaining therapies that advance patient care worldwide,” said Baxter CEO Robert L. Parkinson Jr. “I’m pleased that despite a challenging, global macro-economic environment, our company delivered strong financial and operational performance, while accelerating investments in innovation, advancing our new product pipeline and pursuing other initiatives to enhance long-term growth, while returning significant value to our shareholders.”

Baxter saw steady growth in both its bioscience and medical products sectors, with sales for both increasing 3 percent from the year-ago period. Bioscience revenues were driven primarily by high demand for products used for the treatment of blood clotting disorders and immune system-related diseases, but Baxter also saw gains in its renal business, which treats kidney failure and other system disorders.

“I would look at the quarter overall as stable,” Keusch said. “It’s a stable, in-line company that continues to do a good job at controlling its cost. It’s sort of growing in line, if not better, than most of the hospital supply markets on a global basis.”

For all of 2011, Baxter earned $2.47 billion, or $4.31 per diluted share, up 4 percent from $2.37 billion, or $3.98 per diluted share, in 2010. Revenues rose 8 percent to $13.89 billion from $12.84 billion.

In New York Stock Exchange trading Thursday, Baxter shares rose 2.35 percent to close at $55.65.