The company’s stock was down 0.6% to $72.97 as of about 12:05 p.m. EST following reports that Q1 adjusted EPS came in 9¢ higher than projected. The boost was reported alongside a 14.6% increase in sales and a modest 0.7% increase in profits for the 3 months ended March 31.
Rising sales were driven in large part by a surge in medical products revenues, which in turn were driven by a 68% spike in sales of renal products. That bodes well for Baxter’s $3.9 billion acquisition of dialysis giant Gambro AB, a deal that closed in September. Baxter’s profits took a hit in Q4 thanks in large part to that acquisition.
The medical products division grew 22% overall, compared with 5% growth in Baxter’s bioscience arm.
In total, the company posted $556 million in profit, or $1.01 per diluted share, on sales of $3.95 billion during the quarter. That compared with profits of $552 million, or $1 per share, on sales of $3.45 billion during the same period last year. Excluding special charges, adjusted EPS for the quarter amounted to $1.19, compared with $1.09 last year.
Baxter today confirmed its financial outlook for the year, still expecting sales growth of 9-10% and adjusted EPS of $1.18 to $1.22.
Baxter announced last month that it plans to separate its medical products and pharmaceuticals businesses into independent entities. The split is slated to close by mid-2015.
The move continues a trend among diversified healthcare conglomerates. In 2011, Abbott announced its plans for a similar split, saying it would carve out its pharma operation as a new, publicly traded company later named AbbVie (NYSE:ABBV). Later that year, Covidien said it would also divest its own pharmaceuticals division as Mallinckrodt plc (NYSE: MNK). And late last year Kimberly-Clark (NYSE:KMB) shares hit a 52-week high on the news of its plan to spin out its medical device and health products division as a separate public company called K-C Health Care.