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Home » Baxter doesn’t expect to get to the Greeks

Baxter doesn’t expect to get to the Greeks

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Baxter International Inc.’s (NYSE:BAX) profits fell 9 percent due to higher costs and big write-down from a settlement with the government of Greece.

The Deerfield, Ill.-based medical device and vaccine maker posted net income of $535 million for the three months ended June 30, down 9 percent from $587 million during the same period last year. The results meant earnings of 90 cents per diluted share, down 6 percent from Q2 2009’s 96 cents.

Baxter said its revenues reached $3.19 billion, a 2 percent increase over Q2 2009‘s $3.12 billion, but marketing and administrative costs also rose. The company’s woes also included a $22 million after-tax charge, or $0.03 per diluted share, for a write-down on accounts receivable from a settlement with the government of Greece. The company does not expect to be paid back.

The company’s medical device divisions posted gains for the quarter. Medication delivery revenues increased 9 percent to $1.24 billion, on sales growth of parenteral nutrition and intravenous therapies, anesthesia products and the Sigma Spectrum infusion pump. Kidney therapy product sales increased 6 percent to $585 million.

The company continued to blame a 4 percent decline in its BioScience (pharmaceutical) business on the increase in Medicaid rebates required by drugs manufacturers under healthcare reform legislation. The sector’s revenues fell to $1.36 billion, from $1.43 billion during the year-ago quarter.

Leerink Swann analyst Rick Wise, in a research note to clients, wrote that the results indicated “a solid quarter.” Sales were basically on-target, while gross margins were better-than-expected and the guidance range for 2010 EPS was encouragingly stable. Without the Greek hit, the company would have seen 93 cent EPS, 2 cents ahead of Leerink’s estimate and a penny above market consensus.

Baxter shares were trading at $43.06 in mid-day activity, up 3 percent.

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