Baxter International Inc., helped by continued strong growth in its hemophilia-therapies group, turned in stronger-than-expected third quarter earnings Thursday.
In the latest quarter, net income at the Deerfield Ill.-based maker of health care products slipped to $468 million, or 86 cents per diluted share, from $544 million or 99 cents per diluted share, in the year-ago quarter. Revenue advanced 13 percent to $4.2 billion from $3.71 billion, the same quarter last year, in line with analysts’ consensus.
“Our strong results reflect our strategic focus on improving access to care, as we broaden our global presence and advance the new product pipeline through both internal development and collaborations,” Chief Executive Officer Robert Parkinson told analysts during a conference call.
The latest quarter was saddled with special items– many associated with the company’s plan to split into two separate companies in the coming year — that trimmed profits by $273 million.
Excluding these items, adjusted earnings per share advanced 9 percent to $1.35 from $1.24 a year ago. On that basis, per-share earnings were 4 cents above the $1.31 a share analysts surveyed by Yahoo Finance had been expecting.
Baxter also guided revenue expectations higher, saying it now expects sales growth for full-year 2014 will be in the range of 11 to 12 percent, rather than the 10 to 11 percent it had previously forecast.
In New York Stock Exchange trading Thursday, Baxter shares inched up 16 cents to close at $68.18.
Baxter’s profit surge came despite a big jump in research costs: The company spent $455 million on research and development, a sharp 64 percent increase from the year-earlier quarter’s $277 million.
Baxter said sales at its biopharmaceuticals division climbed 8 percent to $1.73 billion, accelerated by double-digit growth in demand for the company’s hemophilia therapies.
At the company’s highly diverse medical products sector, sales increased 17 percent to $2.52 billion from $2.15 billion from the prior-year period, citing the Gambro acquisition as a contributing factor.
“The fundamentals for Baxter improved this quarter,” William Blair analyst Tony Zimmer said in a research note. “The product pipeline is progressing steadily,” he added, and “We see modest positive momentum in revenues and operating margin.”