Biotech Values

[DewDiligence]

Three cheers for Chicagoland pharma! Both BAX
and ABT put up some nice numbers for the quarter.

http://www.reuters.com/article/marketsNews/idINN2246934920090122

›Baxter Beats the Street

Thu Jan 22, 2009 10:37am EST
By Debra Sherman

CHICAGO, Jan 22 (Reuters) - Baxter International Inc (BAX) posted higher-than-expected higher quarterly earnings on Thursday, and the maker of medical products forecast continued growth in 2009, sending shares up 1.8 percent.

"We think we are very well positioned because of the medically necessary nature of our products. People are not going to go off of dialysis therapy or therapy for immune disorders because of the economy," Chief Executive Robert Parkinson told a conference call.

However, he said he expects an increase in the amount of time it takes customers to pay Baxter in 2009 because of economic weakness.

In the latest quarter, the Deerfield, Illinois, maker of blood therapy products, intravenous drug pumps and renal products, said its net profit was $569 million, or 91 cents per share, versus $478 million, or 74 cents per share, in the year ago period.

The average estimate on Wall Street was for a profit of 89 cents per share, according to Reuters Estimates.

Gains were driven by stronger sales and improved profit margins.

Fourth-quarter worldwide sales rose 4 percent to $3.1 billion. Excluding the impact of foreign currency, worldwide sales increased 9 percent.

A decline in sales in its renal unit were offset by strength in the company's bioscience division, which posted a 12 percent rise, including the impact of foreign exchange, or 17 percent excluding foreign exchange.

For the full year, Baxter forecast sales, excluding the impact of foreign exchange, to grow about 7 percent. Excluding the unfavorable impact of foreign exchange, Baxter sees sales growth about flat compared with 2008, based on current rates.

Baxter said it expects 2009 earnings per diluted share to be $3.70 to $3.78, before any special items, well within the average estimate of $3.74, according to Reuters Estimates.

"We see this guidance as conservative and expect management to continue its pattern of beat and raise," JP Morgan analyst Michael Weinstein wrote in a research note. "To put this in perspective, at the start of 2008, management provided initial guidance of $3.10 to 3.18 a share, yet ended up delivering $3.38."

The company said it expects first-quarter sales growth, excluding the impact of foreign exchange, of 7 percent. Adjusting for foreign exchange, the company sees first-quarter sales flat versus the 2008 quarter. It forecast earnings per diluted share to be between 80 cents and 82 cents, before items. According to Reuters Estimates, the average estimate was 83 cents per share.‹