Press releases

Baxter Reports Solid Second Quarter Financial Results

Q2 Earnings Exceed Guidance
and Company Confirms Full-Year Expectations

DEERFIELD, Ill., July 18, 2013 - Baxter International Inc. (NYSE:BAX) today announced solid financial results for the second quarter, with earnings that exceeded the company's previously issued guidance, and confirmed its full-year 2013 financial outlook.

For the second quarter, Baxter reported net income of $590 million and earnings per diluted share of $1.07, compared to net income of $661 million and earnings per diluted share of $1.19 in the same period last year.  Second quarter 2013 results include after-tax special items totaling $49 million (or $0.09 per diluted share) primarily for costs associated with Baxter's planned acquisition of Gambro AB.  Second quarter 2012 results included a net after-tax benefit from special items totaling $42 million of income (or $0.07 per diluted share).

On an adjusted basis, excluding special items in both periods, Baxter's second quarter net income of $639 million increased 3 percent from $619 million reported in 2012. Adjusted earnings per diluted share of $1.16 rose
4 percent from $1.12 per diluted share last year, exceeding the company's previously issued earnings guidance of $1.12 to $1.14 per diluted share.

Worldwide sales totaled $3.7 billion and increased 3 percent from prior-year levels. Excluding the impact of foreign currency, worldwide sales rose
4 percent. Sales within the United States advanced 3 percent to $1.5 billion, and international sales of $2.1 billion also increased 3 percent. Excluding foreign currency, international sales grew 4 percent.

BioScience revenues of $1.6 billion increased 5 percent from the prior-year period. Excluding the impact of foreign currency, BioScience sales rose
6 percent driven primarily by improved demand for the company's hemophilia therapies, including ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method]  and FEIBA (an inhibitor therapy), as well as accelerated growth of select specialty plasma-based therapeutics and vaccines.

Medical Products sales of $2.0 billion increased 1 percent from the prior-year period, and excluding the impact of foreign currency, sales grew 2 percent. This performance was driven primarily by gains in peritoneal dialysis patients, as well as growth of certain injectable therapies and anesthesia products.

Six-Month Results
For the first six months of 2013, Baxter reported net income of $1.1 billion, or $2.07 per diluted share.  Excluding special items, Baxter's adjusted net income for the six-month period increased 3 percent to $1.2 billion, and earnings per diluted share of $2.22 grew 4 percent from $2.13 per diluted share reported in the comparable prior-year period.

Baxter's worldwide sales for the six-month period totaled $7.1 billion and increased 2 percent, and excluding the impact of foreign currency, sales rose 3 percent. BioScience sales of $3.2 billion advanced 5 percent (and excluding foreign currency sales also increased 5 percent), while Medical Products sales of $3.9 billion were comparable to the prior-year period (and excluding foreign currency sales increased 1 percent).

During the first half of 2013, Baxter generated cash flows from operations of approximately $1.1 billion and returned significant value to shareholders. On a year-to-date basis, Baxter has returned over $1.2 billion to shareholders through share repurchases of $717 million (or approximately 10 million shares) and dividends totaling $490 million, reflecting more than a 30 percent increase in dividend payments versus the prior-year period.

"Baxter's financial results reflect the benefits of our diversified healthcare model," said Robert L. Parkinson, Jr., chairman and chief executive officer. "We continue to advance care across our key franchises in both developed and emerging markets, while focusing on innovation and R&D programs that will fuel future growth and enhance value for shareholders".

Recent Highlights
Baxter continued to advance its new product pipeline, achieving several milestones during the quarter, including:

  • Receipt of marketing authorization in all European Union (EU) Member States for the use of HyQvia (solution for subcutaneous use) as replacement therapy for adult patients with primary and secondary immunodeficiencies. Baxter will introduce HyQvia in select countries during 2013 and plans to expand the launch to other EU countries in 2014.
  • United States Food and Drug Administration (FDA) approval of RIXUBIS [Coagulation Factor IX (Recombinant)] for routine prophylactic treatment, control of bleeding episodes, and perioperative management in adults with hemophilia B. RIXUBIS is the first new recombinant factor IX (rFIX) approved for hemophilia B in more than 15 years and is the only rFIX indicated for both routine prophylaxis and control of bleeding episodes in the U.S. for adult patients living with this chronic condition.  Hemophilia B is the second most common type of hemophilia and is the result of insufficient amounts of clotting factor IX, a naturally occurring protein in blood that controls bleeding.
  • Completion of enrollment in the pivotal Phase III study of rigosertib for patients with high-risk myelodysplastic syndrome (MDS), as part of an ongoing collaboration with Onconova Therapeutics. The primary endpoint for this study is overall survival, and top-line results from the study are expected during the first quarter of 2014.
  • Completion of the nocturnal in-center study of the company's home hemodialysis system VIVIA, in Canada. Data from the Canadian study and the previously completed U.S. study will support the company's submission for CE Mark in Europe later this year. 

Outlook for Third Quarter and Full-Year 2013
Baxter also announced today its guidance for the third quarter and confirmed its financial outlook for full-year 2013. As previously disclosed, the company's guidance includes the impact of the Gambro AB acquisition which is anticipated to close during the third quarter.

For the third quarter of 2013, Baxter expects sales growth, excluding the impact of foreign currency, of approximately 6 percent (or approximately
5 percent including the impact of foreign exchange). Including revenues associated with the Gambro AB acquisition, Baxter expects sales growth, excluding the impact of foreign currency, of 10 to 13 percent (or approximately 9 to 12 percent including the impact of foreign currency). The company projects earnings per diluted share in the third quarter, including the impact of the Gambro AB acquisition, of $1.18 to $1.21, before any special items. 

For full-year 2013, Baxter expects sales growth, excluding the impact of foreign exchange and the Gambro AB acquisition, of approximately 4 percent (or approximately 3 percent including the impact of foreign currency). Including revenues associated with the Gambro AB acquisition, Baxter now expects sales growth, excluding the impact of foreign currency, of 8 to 9 percent
(or 7 to 8 percent including the impact of foreign currency). In addition, the company expects earnings, including the impact of the Gambro AB acquisition, of $4.62 to $4.70 per diluted share, before any special items, and cash flows from operations of approximately $3.3 billion.

A webcast of Baxter's second quarter conference call for investors can be accessed live from a link on the company's website at beginning at 7:30 a.m. CDT on July 18, 2013.  Please visit Baxter's website for more information regarding this and future investor events and webcasts.

Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.

This release includes forward-looking statements concerning the company's financial results, business development activities, R&D pipeline and outlook for 2013, including as impacted by the pending Gambro AB acquisition. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: demand for and market acceptance risks for new and existing products, such as ADVATE, and other technologies; future actions of regulatory bodies and other governmental authorities that could delay, limit or suspend product development, manufacturing or sales or result in sanctions; product quality or patient safety concerns leading to product recalls, withdrawals, launch delays, litigation, or declining sales; the ability of the company to obtain required regulatory approvals including additional antitrust approvals and satisfy closing conditions with respect to the Gambro AB transaction; the ability of the company to close the Gambro AB acquisition during the third quarter of 2013 and generate the sales included in the company's outlook for 2013; future actions of governmental authorities and other third parties as U.S. healthcare reform legislation and other austerity measures are implemented globally; additional legislation, regulation and other governmental pressures, which may affect pricing, taxation, reimbursement and rebate policies of government agencies and private payers or other elements of the company's business; product development risks, including satisfactory clinical performance; the company's ability to realize the anticipated benefits from its business development and R&D activities; inventory reductions or fluctuations in buying patterns by wholesalers or distributors; the impact of geographic and product mix on the company's sales; the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies; the availability of acceptable raw materials and component supply; fluctuations in supply and demand and the pricing of plasma-based therapies; the ability to enforce company patents; patents of third parties preventing or restricting the company's manufacture, sale or use of affected products or technology; the impact of global economic conditions on Baxter and its customers, including foreign governments in certain countries in which the company operates; foreign currency fluctuations and other risks identified in the company's most recent filing on Form 10-K and other Securities and Exchange Commission filings, all of which are available on the company's website. The company does not undertake to update its forward-looking statements. Financial schedules are attached to this release and available on the company's website.