Baxter's Third Quarter Earnings Rise 17 Percent
Strong Fundamentals Position Company Well to Meet Financial Commitments For
2000, Accelerate Sales Growth in 2001
Due to Decline in Euro, 2001 Earnings Growth Target
Revised to Low Double Digits
DEERFIELD, Ill., Oct. 19 /PRNewswire/ -- Baxter International Inc. (NYSE: BAX) today reported that its third quarter earnings grew 17 percent to $231 million, or $0.77 per diluted common share, from the $197 million, or $0.67 per diluted common share reported last year.
Sales grew six percent in the quarter to $1.69 billion, up from $1.59 billion last year. Excluding the impact of foreign exchange, Baxter's sales in the third quarter increased 10 percent. Domestic sales rose 4 percent in the quarter, while international sales grew 8 percent (or 14 percent excluding the impact of foreign exchange).
By business segment, Baxter reported sales of $546 million from its BioScience business, $682 million from I.V. Systems/Medical Products and $459 million from Renal. Contributing to growth in the BioScience business were vaccines and leukoreduction systems that remove white blood cells from blood and blood components used for transfusion. Anesthesia products and electronic infusion pumps fueled growth in Baxter's I.V. Systems/Medical Products business, while Baxter's Renal sales were boosted by its Althin acquisition earlier this year and growth in Europe of Extraneal, a long-dwell time solution used in peritoneal dialysis.
"Once again, we continued the momentum established over the last several quarters with strong operational performance in the third quarter," said Harry M. Jansen Kraemer, Jr., chairman and chief executive officer. "Our solid financial results, together with FDA approval of the second manufacturing suite at our Thousand Oaks bioscience facility, position us well for a strong fourth quarter and successful conclusion to the year."
Capacity Expansion at Thousand Oaks Facility
In early October, Baxter received U.S. Food and Drug Administration (FDA) licensure for a second production suite at its Thousand Oaks, California facility. The facility manufactures Baxter's recombinant Factor VIII therapy, Recombinate Antihemophilic Factor (rAHF), which is a clotting factor produced by recombinant DNA technology as a therapy for people with hemophilia.
The company is working to bring additional capacity on-line to respond to growing demand from patients worldwide. Baxter expects to receive licensure of the second manufacturing suite, along with a third manufacturing suite at Thousand Oaks, from European regulatory authorities in the fourth quarter of 2000. The company anticipates it will receive FDA licensure of the third manufacturing suite in 2001.
Nine-Month Results
Baxter's earnings for the first nine months of this year, excluding special charges, rose 18 percent to $645 million, or $2.17 per diluted common share, from the $548 million or $1.86 per diluted common share reported last year.
Nine-month sales totaled $4.96 billion, up 8 percent (or 11 percent excluding the impact of foreign exchange) from the $4.61 billion reported in 1999. Domestic sales grew 8 percent to $2.26 billion, while international sales grew 8 percent (or 15 percent excluding the impact of foreign exchange) to $2.70 billion in the nine-month period. By business segment, Baxter reported nine-month sales of $1.66 billion for BioScience, $1.97 billion for I.V. Systems/Medical Products and $1.33 billion for Renal.
Financial Commitments for 2000
"Given our strong performance to date, we fully expect to achieve our financial commitments for this year. These commitments are sales growth of approximately 10 percent, earnings growth in the mid-teens and operational cash flow in excess of $500 million," Kraemer said.
Financial Commitments for 2001
"We are extremely well positioned for 2001 and beyond. The ongoing capacity expansions at our Thousand Oaks facility, new product introductions, successful integration of recent acquisitions, and continued global expansion are expected to fuel further growth," Kraemer continued.
"Specifically for 2001, we expect to accelerate our sales growth to the low double digits and generate a minimum of $500 million in cash flow in 2001. Because of the decline in the Euro, we are revising our 2001 earnings growth commitment to low double digits from the mid-teens. Of course, if the Euro strengthens, I expect our earnings in 2001 to be higher." |
