Thursday, July 28, 2011

BAX- Kills 2Q earnings, raises FY 2011 guidance

Baxter has reported strong earnings for Q2 along with guidance for Q3. They reported a net income for the second quarter ending June 30, 2011 at $615 million, or $1.07 per diluted share, which beat our estimate of $543 million, or $0.94 per share. Net sales for the second quarter of 2011 were $3.54 billion, compared to $3.19 billion for the same quarter of 2010.

For the third quarter of 2011, the company expects sales growth, excluding the impact of foreign currency, of 3 to 4 percent (or 6 to 7 percent including the benefit of foreign currency) and earnings per diluted share of $1.07 to $1.09, before any special items. For full-year 2011, Baxter now expects earnings, before special items, of $4.27 to $4.32 per diluted share versus previous guidance of $4.20 to $4.28 per diluted In addition, the company expects to generate cash flows from operations of approximately $2.8 billion.

Baxter also announced today that it has established Baxter Ventures to invest up to $200 million in equity in promising early-stage companies developing therapies that complement Baxter’s existing portfolio.

“Baxter’s mission is to apply innovative science to develop therapies and medical technologies that save and sustain patients’ lives,” said Robert L. Parkinson, Jr., Chairman and Chief Executive Officer of Baxter. “As the company’s internal capabilities have advanced our late-stage pipeline, we have the capacity to further accelerate the early-stage development of essential therapies.”

Baxter was trading at 62.15 earlier this week and nearly hit it’s price target of $62.66 before falling over 3% as the market continued to slip today and closed at $58.70.

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