Baxter warning prompts SEC action
By Christopher Bowe in New York
Published: July 17 2003 20:33 | Last Updated: July 17 2003 20:33
Baxter International on Thursday issued its third profits warning since March. Because of that, it said US regulators at the Securities and Exchange Commission had requested information related to "recent downward revisions to the company's growth and earnings forecasts" for this year.
The group said it was co-operating fully and that the SEC's letter said the request did not imply that laws had been broken.
The US medical products group warned that its third-quarter earnings would fall below Wall Street's expectations as it revealed that its second-quarter earnings plunged 76 per cent on restructuring charges.
The maker of dialysis equipment, biotechnology blood proteins, vaccines and other products has been battling disappointing growth in its critical, and profitable, blood plasma and proteins business. It recently cut the sales growth expected in this division to 5-10 per cent for this year.
Baxter said third-quarter earnings would be 45-50 cents per share, below the 54 cents analysts have been forecasting. For the full year, Baxter said earnings, including charges, would be $1.65-$1.75 per share.
On Thursday the group expanded the scope of its restructuring programme. It will now close 30 facilities around the world, rather than the original 27, and increase the job cuts from 2,500 to 3,200 workers, or 6 per cent of its workforce. It is restructuring its plasma collection facilities and consolidating others including Frankfurt in Germany, Issoire in France and Mirandola in Italy. It plans to save 15-20 cents per share from the actions.
The restructuring caused Baxter to take $202m, or 33 cents per share, in after-tax charges against earnings in the second quarter.
Therefore, earnings, including items, were $9m, or 8 cents per share, down from $204m, or 33 cents, last year. Excluding charges earnings fell 16 per cent, in line with expectations.
Sales in the quarter increased 11 per cent to $2.16bn. Baxter expects sales to increase 8-10 per cent for the full year.
Shares in Baxter rose 2 per cent to $24.45. |
