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Healthcare

UPDATE 4-Baxter earnings rise, but sales flat and stock off

* Q3 net up 12 pct, but sales flat from a year ago

* Sales fall below Street view, FX weighs

* Shares fall 3.5 percent

* To record $30 mln to $40 mln in H1N1 vaccine sales in Q4 (Adds conference call, more comment, byline, updates stock)

By Debra Sherman

CHICAGO, Oct 15 (Reuters) - Baxter International Inc BAX.N reported slightly higher than expected quarterly earnings as expenses fell and margins expanded, but sales missed Wall Street's expectations, driving the hospital products maker's shares lower on Thursday.

The company, which also makes blood therapy and renal therapy products, pointed the Street towards the high end of its prior forecast range, calling for full-year earnings per share of $3.79 to $3.81 instead of $3.76 to $3.80.

For the current fourth quarter, it now expects earnings per share of $1.02 to $1.04, with sales up 8 percent to 10 percent.

Baxter said third-quarter earnings rose 12 percent to $530 million, or 87 cents per share, from $472 million, or 74 cents per share, a year earlier.

Excluding one-time charges, profit was 98 cents a share. Analysts on average had expected 97 cents, according to Thomson Reuters I/B/E/S.

Earnings per share benefited from the company’s continued share repurchase program.

Sales were $3.14 billion, unchanged from a year earlier and below Wall Street estimates of $3.19 billion. Excluding the negative impact of foreign exchange rates, sales would have been up 7 percent.

Sales in the bioscience unit, which includes vaccines and blood therapy products, rose 2 percent but were slightly lower than many had expected, due partly to weaker than expected plasma protein sales.

Baxter Chief Financial Officer Rob Davis told a conference call that the company shifted $35 million in orders of plasma proteins and antibody therapy, primarily in Eastern Europe and Latin America, to the fourth quarter from the third quarter.

“We continue to see strong demand and favorable year-on-year price improvements across the entire plasma protein portfolio,” he said.

Davis said his outlook for plasma sales has not changed.

“We’re still confident we’re going to see (percentage increases in the) high teens for the full year on a constant currency basis,” Davis told analysts.

He also said he company will recognize $30 million to $40 million in revenue in the fourth quarter from its H1N1 vaccine, which the company began shipping in August.

Chief Executive Robert Parkinson characterized the business as a “multiyear opportunity.”

Among other business segments, renal sales fell 3 percent, while medication delivery sales rose 1 percent.

Parkinson told the conference call that he sees “general improvement” in capital spending among U.S. hospitals.

“Over the next 6 to 12 months, we think investor focus will shift from stability to pipeline-driven growth,” said Goldman analyst David Roman, who reaffirmed his “neutral” rating.

“Until greater clarity emerges on the viability of the pipeline, we do not see much upside to the stock,” he wrote in a research note.

Shares of Baxter were down $2.05 or 3.6 percent at $54.95 in morning trading. (Reporting by Debra Sherman; Editing by Gerald E. McCormick and Lisa Von Ahn)

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