Healthcare giant Baxter (NYSE:BAX) reported Q4 earnings right on target with analysts’ estimates, with healthy increases to its top and bottom lines over the course of the quarter and the year.
Baxter’s Q4 increase in sales was driven primarily by its biosciences division, which grew 7% during the 3 months ended Dec. 31, 2012. The medical products division, which includes renal, infusion therapies and anesthesia systems, grew 2% during the 4th quarter, bolstered by increases in renal sales and IV therapies, which helped make up for declines in infusion systems and anesthesia.
The Deerfield, Ill.-based company reported $494 million in profit during Q4, or 89¢ per diluted share, a 6.7% increase compared to earnings of $463 million, or 82¢ per share, during the same period in 2011. Adjusted for special expenses, Baxter’s $1.26 per-share hit analysts’ expectations exactly.
Total sales increased 4.4% to $3.75 billion during the quarter, compared with $3.59 billion during the same period in 2011.
Baxter’s medical products division grew 2% in the final 3 months of the year compared with the same period in 2011, driven mostly by global injectables and IV therapies. Infusion system sales sank 11% and anesthesia products slid 5% over the course of the quarter. The decrease was especially stark in U.S., where infusion system sales decreased by 17% during the quarter and anesthesia systems lost 15%.
For the full year Baxter reported $2.33 billion in profits, or $4.18 per share, on sales of $14.19 billion. That’s a 2% boost in sales and 4.6% boost in profits compared to 2011. Adjusted for special expenses Baxter’s 2012 EPS came to $4.53, a 5% increase from 2011 and again hitting analysts’ estimates.
Baxter increased its R&D funding by 22% to $1.16 billion in 2012, reflecting a slate of clinical programs in the company’s pipeline, according to the report. The healthcare giant also completed its 1st U.S. home hemodialysis study and launched a nocturnal in-center trial in Canada, both of which will support a 2013 CE Mark submission for European regulatory approval.
"Baxter’s core portfolio continues to benefit from our focus on life-saving therapies, and the increased level of R&D investment has transformed our new product pipeline into a robust portfolio of products and therapies directed at improving the quality of care while addressing key, high-potential areas of unmet medical need," chairman & CEO Robert Parkinson said in prepared remarks. "We’ve also entered into a number of partnerships and executed business development initiatives that align with our core strengths, position Baxter for future success, and enhance shareholder value."
Baxter expects to see 10% sales growth in 2013 and aims to hit per-share earnings in the range of $4.60 to $4.70 before special items. The company expects to take a 10¢ to 15¢ per-share hit due to the $4 billion buyout of Swedish dialysis giant Gambro.
"The progress we have made during 2012, together with our solid financial performance, sets a very strong foundation for 2013 and beyond," Parkinson said. "We remain very confident in the long-term growth prospects for our company."
BAX shares some some gains on Wall Street today, trading at a 1.5% increase to $67.59 as of about 1:25 p.m.