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Baxter International Inc.'s (BAX) first-quarter earnings rose 3.2% as the medical-products company saw growth across its core segments, driven by strong demand for its hemophilia and immunodeficiency treatments, as well as its anesthesia products.
Results topped the company's own guidance. For the year, it raised the low end of its per-share earnings outlook by 2 cents to a range of $4.49 to $4.57, while affirming its revenue growth view.
Baxter has seen solid sales and profit growth in recent quarters on the sales of medical devices, pharmaceuticals and biotechnologies for dire problems such as cancer, immune disorders and trauma. Because they treat life-threatening diseases and injuries, many of Baxter's products haven't felt pressure from the slowdown in health-care spending, as others have.
The Deerfield, Ill., company also reiterated Thursday its commitment to HyQ, a drug that is infused under the skin and used to treat immune-system disorders. Baxter and Halozyme Therapeutics Inc. (HALO) said earlier this week that the U.S. Food and Drug Administration requested additional information related to long-term use of the drug. The delay "could compress growth and margin expansion," said Ben Andrew, analyst at William Blair & Co.
Baxter Chief Executive Robert L. Parkinson Jr. said Thursday that the company and Halozyme "will work closely together to further understand the FDA's request and develop a plan to provide additional data."
While there has been some speculation on the Street that Baxter might more aggressively pursue acquisitions as a result of the delay, Parkinson said that wasn't the case.
Baxter reported a profit of $588 million, or $1.04 a share, up from $570 million, or 98 cents, a year earlier. Excluding charges tied to in-process research and development, acquisitions and other items, earnings rose to $1.01 a share.
Revenue was $3.34 billion, up 3.2% from a year earlier. Excluding the impact of foreign currency, revenue grew 4%.
In January, Baxter projected earnings of 98 cents to $1 a share on revenue growth of 2%, excluding currency impacts.
Baxter forecast current-quarter earnings of $1.10 to $1.12 a share, excluding special items, on revenue growth of 3% to 4%, excluding currency impacts. Analysts polled by Thomson Reuters recently projected earnings of $1.12 and flat sales growth.
First-quarter sales at Baxter's medical products segment, which includes the company's anesthesia products and renal businesses, rose about 2.7%. Sales in the BioScience unit, which includes plasma-based medical products such as drugs for treating hemophilia and immune disorders, increased about 3.8%.
The company recently said it would build a new manufacturing plant in Georgia in efforts to expands its plasma-based treatments.
Baxter shares, up 9.9% year to date, fell 10 cents to $54.29.
-By Anjali Athavaley and Kristin Jones, Dow Jones Newswires; 212-416-4912; [email protected]