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United States : Raises Full-Year 2017 GAAP EPS to $1.66 to $1.80; Adjusted EPS to $2.20 to $2.28.

Baxter International Inc. today reported results for the first quarter of 2017 and increased its full-year 2017 guidance. Encouraged by a solid start to 2017 and the on-going momentum of our business transformation initiatives, we are raising our full-year sales and earnings outlook, said Jos (Joe) E. Almeida, chairman and chief executive officer. We are driving growth through disciplined execution and particular strength across our U.S. businesses. We will continue to invest in evolving our portfolio through the introduction of innovative products and technologies along with geographic expansion to deliver future growth.

First-Quarter Financial Results

In the first quarter, worldwide sales totaled $2.5 billion, an increase of 4 percent on a reported basis and 5 percent on a constant currency basis as compared to the prior-year period. Operationally, Baxters sales rose 7 percent, which excludes the impact of foreign exchange, generic competition for U.S. cyclophosphamide and the previously communicated select strategic product exits the company is undertaking.

Sales within the U.S. were $1.1 billion, advancing 11 percent on a reported basis. International sales of $1.4 billion declined 1 percent on a reported basis and were comparable to the prior year on a constant currency basis. Baxters operational sales increased 13 percent in the U.S. and 2 percent internationally. Global sales for Hospital Products totaled $1.6 billion in the first quarter, increasing 7 percent on both a reported and constant currency basis and advancing 10 percent operationally as compared to the prior-year period. Contributing to performance in the quarter were strong U.S. sales of IV therapies, IV access sets, and select anesthesia and critical care products along with favorable demand for parenteral nutrition therapies and international biosurgery products.

Baxters Renal sales totaled $896 million, comparable to the prior year on a reported basis and grew 1 percent globally on a constant currency basis. Operationally, global Renal sales advanced 2 percent benefitting from increased sales of peritoneal dialysis therapies driven by the continued adoption of the companys newest Automated Peritoneal Dialysis (APD) cyclers - AMIA in the U.S. and HOMECHOICE CLARIA in international markets. Additionally, sales of Baxters acute renal care products advanced globally, reflecting growing demand for continuous renal replacement therapies (CRRT). Baxter reported income from continuing operations of $273 million, or $0.50 per diluted share, on a GAAP (Generally Accepted Accounting Principles) basis for the first quarter. These results included special items totaling $62 million ($45 million net after-tax), primarily related to business optimization and intangible asset amortization. On an adjusted basis, excluding special items, Baxters first quarter income from continuing operations totaled $318 million, or $0.58 per diluted share, exceeding the companys previously issued guidance of $0.50 to $0.52 per diluted share.

Business Highlights

Baxter has recently achieved a number of operational, pipeline and commercial milestones in support of its strategy to drive accelerated growth and deliver meaningful innovation for patients and healthcare professionals around the world.

In Surgical Care:

Introduced customer-centric enhancements to Baxters leading hemostatic agents, FLOSEAL and TISSEEL, designed to enhance patient safety and ease of use for clinicians.

Published two health economic data analyses in the Journal of Medical Economics supporting FLOSEAL as a cost-effective hemostat that may contribute to broader cost savings at hospitals as compared to other options Acquired Wound Care Technologies Incorporated, manufacturer of the DERMACLOSE Continuous Tissue Expander, an innovative wound closure technology that is complementary to Baxters surgical portfolio and directly leverages its existing expertise and channel strength.

In Integrated Pharmacy Solutions:

Entered into an exclusive strategic partnership with Scinopharm, one of the worlds leading active pharmaceutical ingredient (API) manufacturers, to bring to market five generic injectables used in cancer treatments, with an option to add up to 15 additional injectable molecules.

In Renal:

Surpassed 500,000 patient treatments administered globally utilizing Baxters SHARESOURCE Connectivity Platform. SHARESOURCE is the first and only two-way remote patient management system for home dialysis therapy and is available on both AMIA and HOMECHOICE CLARIA APD cyclers. Successful deployment of PRISMAX, Baxters next generation continuous renal replacement therapy platform, in several European locations as part of an initial limited distribution prior to the planned full-scale launch in 2018.

Financial Outlook

For full-year 2017: Based on the companys strong first quarter, Baxter is raising its financial outlook for the year. The company now expects sales growth of approximately 1 to 2 percent on a reported basis or 2 to 3 percent on a constant currency basis, and earnings from continuing operations, before special items, of $2.20 to $2.28 per diluted share for the full year. Adjusting for the impact of generic cyclophosphamide competition (an estimated one percent) and selected strategic product exits (an estimated one percent), Baxter expects underlying constant currency sales growth of approximately 4 to 5 percent. This guidance does not include any impact from the companys proposed acquisition of Claris Injectables, which is expected to close in the second half of 2017.

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Publication:Mena Report
Article Type:Financial report
Date:Apr 29, 2017
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