Baxter International Inc (BAX.N) on Thursday said quarterly net earnings fell slightly, as expected, on acquisition-related costs.
The maker of kidney dialysis equipment and blood therapy products affirmed its outlook for the full year, calling for earnings per share of $4.60 to $4.70, before items, with sales growing about 10 percent, excluding the impact of foreign exchange translations. The outlook includes the impact of its acquisition of Gambro AB, a developer of dialysis products and therapies, which is expected to close at the end of the second quarter.
First-quarter net earnings were $552 million, or $1.00 per share, compared with $588 million, or $1.04 per share, in the year-earlier period.
Results include after-tax special items totaling $29 million, or 5 cents per share, primarily for costs associated with the Gambro acquisition. The latest quarter also included a net after-tax benefit from special items totaling $19 million of income, or 3 cents per share, for payments pertaining to business development transactions.
Excluding items, adjusted earnings per share were $1.05, which was a penny above what Wall Street analysts were expecting on average, according to Thomson Reuters I/B/E/S.
First-quarter sales rose to $3.45 billion from $3.39 billion a year ago.
Strength in higher-margin BioScience product lines, including Hemophilia and BioSurgery, was offset by a shortfall in Medical Products, which includes medical infusion pumps.
"We are encouraged by the continued strength in U.S. hemophilia, and the relative stability in BioTherapeutics, however we expect anticipation around the forthcoming results of the company's Alzheimer's trial to continue to drive the stock," Matt Miksic, an analyst with Piper Jaffray & Co, wrote in a research note. Miksic has an "overweight" rating on the stock.
During a conference call, Baxter executives told analysts they expected to finish a late-stage trial testing its drug Gammagard, an immune globulin that is already approved to treat primary immune deficiency, on Alzheimer's patients. Smaller trials have suggested that the drug slows progression of the mind-robbing disease.
Baxter shares were off 0.5 percent at $69.91 on Thursday morning on the New York Stock Exchange, tracking weakness in the broad market.
(Reporting by Debra Sherman in Chicago; editing by Gerald E. McCormick, Maureen Bavdek and Matthew Lewis)