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Baxter International's fourth-quarter earnings rise despite one-time expense

by Stephanie Howson
Jan 24, 2013


Stephanie Howson/MEDILL

Baxter International Inc.’s share price (blue) stayed stable throughout 2009 and reached its highest in five years during the company’s fourth quarter in 2012.

Deerfield-based medical giant Baxter International Inc., the maker of medical devices and therapies for chronic conditions such as hemophilia and kidney disease, reported fourth-quarter earnings that highlighted steady sales growth and increased profits despite a large one-time expense.

“The progress we have made during 2012, together with our solid financial performance, sets a very strong foundation for 2013 and beyond,” said CEO Robert Parkinson Jr. during a conference call Thursday.

In the latest quarter, Baxter reported net income of $494 million, or 89 cents per diluted share, up 7 percent from $463 million, or 82 cents per diluted share, in the year-ago period.

The company’s bottom line was hurt by $206 million in special items related to layoffs and pension obligations. Excluding these charges, Baxter’s earnings would have been $700 million, or $1.26 per share, matching the estimates of analysts surveyed by Yahoo Finance.

The company’s sales rose 4.4 percent to $3.75 billion from $3.59 billion in 2011.

“It was a startlingly in-line quarter,” said Ben Andrew, an analyst at William Blair & Co. “There was not a lot to get worked up about.”

Because many of the company’s products are medically necessary rather than elective, Baxter has been less affected by slowdowns in health-care spending, Andrew confirmed. However, the company expects global austerity measures and a new medical device tax to negatively affect its earnings in 2013.

For all of 2012 Baxter posted a profit of $2.33 billion or $4.18 per diluted share, a 4.6 percent increase from $2.22 billion or $3.88 per share, in 2011.

Sales for the year rose to $14.19 billion, a 2.1 percent increase from $13.89 billion in 2011.

Baxter shares increased $1.19 to close at $67.78 Thursday.