Specialty drug and medical device maker Baxter International Inc. (BAX-Quote) said Thursday its profit rose 8 percent in the second quarter on better margins, more than offsetting a decline in sales.
The company's broad mix of medically necessary products -- including blood plasma, kidney dialysis treatments and cancer drugs -- continued to post solid returns, leading the company to boost its 2009 earnings outlook.
"These results and also the outlook for the year validate the strength of the diversified healthcare model and reinforce our confidence in achieving longer-term objectives," said CEO Robert Parkinson.
The company earned $587 million, or 96 cents per share, up from profit of $544 million, or 85 cents per share, in the same period a year ago. Sales fell 2 percent to $3.12 billion from $3.19 billion.
Analysts polled by Thomson Reuters expected profit of 94 cents per share on revenue of $3.12 billion.
Worldwide sales fell 2 percent to $3.1 billion mainly because of a lower benefit from foreign currency exchange rates. Excluding that, the company said sales would have grown 9 percent. U.S. sales grew 7 percent to $1.3 billion.
Baxter said revenue from its largest unit, BioScience, grew 2 percent to $1.4 billion. The unit sells antibody therapies and plasma proteins, which saw sales increase more than 20 percent.
Revenue from Baxter's medication delivery business fell 3 percent to $1.1 billion. That unit includes dialysis treatments, anesthesia products and injectable drugs.
Baxter is one of a handful of companies working on a vaccine for the swine flu, which has appeared in 37,000 cases in the U.S., with more than 200 deaths.
Parkinson said the company is completing production of several batches of the vaccine which should be ready to ship by later this month or early August. Baxter expects to see a $30 to $40 million revenue boost from sales of the vaccine this year, according to Parkinson.
Looking ahead, Baxter International Inc. expects third-quarter adjusted profit between 95 cents and 97 cents per share, while analysts expect profit of 96 cents per share.
Baxter also boosted its full-year earnings-per-share outlook to a range of $3.76 and $3.80, from a prior forecast of $3.72 and $3.78. Analysts expect profit of $3.77 per share.
Company shares rose $2.12, or 4 percent, to $55.21 in morning trading.
Disclosure I am long BAX shares in Healthcare Folio.
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