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Baxter Reports Second-Quarter 2017 Results and Provides Updated Financial Outlook for 2017 and 2020

DEERFIELD, Ill.--(BUSINESS WIRE)--Baxter International Inc. (NYSE:BAX) today reported results for the second quarter of 2017 and increased its financial outlook for full-year 2017 and 2020.

“Our solid second quarter performance reflects continued execution of our strategic objectives,” said José (Joe) E. Almeida, chairman and chief executive officer. “Baxter’s focus on innovation and operational excellence is fueling our mission to save and sustain lives, and deliver improved performance for our patients, customers and shareholders. In light of this progress and potential, we are raising our financial outlook for both full-year 2017 and 2020.”

Second-Quarter Financial Results

In the second quarter, worldwide sales totaled $2.6 billion, an increase of 1 percent on a reported basis and 2 percent on a constant currency basis as compared to the prior-year period. Operationally, Baxter’s sales rose 3 percent, adjusting for 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 4 percent. International sales totaled approximately $1.5 billion, representing a 2 percent decrease on a reported basis and a 1 percent increase on a constant currency basis. Baxter’s operational sales increased 5 percent in the U.S. and 2 percent internationally.

Global sales for Hospital Products totaled $1.6 billion in the second quarter, increasing 1 percent on a reported basis, 2 percent on a constant currency basis and 4 percent operationally as compared to the prior-year period. Performance in the quarter benefited from continued strength in our U.S. fluid systems business, favorable demand for parenteral nutrition therapies and pre-mixed injectable pharmaceuticals, as well as for select anesthesia and critical care products.

Baxter’s Renal sales totaled $968 million, comparable to the prior year on a reported basis and up 3 percent on both a constant currency basis and operational basis. Growth in the quarter was driven by increased sales for in-center hemodialysis (HD) products in the U.S., international acute renal care sales and global sales of peritoneal dialysis (PD) therapies.

Baxter reported income from continuing operations of $264 million, or $0.48 per diluted share, on a GAAP (Generally Accepted Accounting Principles) basis for the second quarter. These results included special items totaling $113 million ($84 million net after-tax), primarily related to business optimization, intangible asset amortization and the deconsolidation of the company’s Venezuela business.

On an adjusted basis, excluding special items, Baxter’s second quarter income from continuing operations totaled $348 million, or $0.63 per diluted share, exceeding the company’s previously issued guidance of $0.55 to $0.57 per diluted share.

Business Highlights

In support of its strategy to accelerate profitable growth and deliver meaningful innovation for patients and healthcare professionals around the world, Baxter has achieved a number of recent operational, pipeline and commercial milestones.

  • Secured clearance from all regulatory authorities to complete the company’s proposed acquisition of Claris Injectables Limited, a global generic injectables pharmaceutical company. The transaction significantly broadens Baxter’s presence in the generic pharmaceuticals space and will help boost the supply of essential medicines to Baxter customers. The company expects to close the transaction by the end of July 2017.
  • Entered into an agreement with Dorizoe Lifesciences Limited, a full-service global contract research and development organization, that will facilitate accelerated development of more than 20 generic injectable products.
  • Received U.S. Food and Drug Administration (FDA) approval of two new premixed injectables - clindamycin injection in both saline and dextrose presentations. Baxter is the first and only company to offer a premixed clindamycin injection in a saline presentation, which makes this commonly prescribed antibiotic suitable for use with a wider patient population.
  • Announced research and clinical development collaborations with leading institutions -- Mayo Clinic and Ramot at Tel Aviv University/Tel Aviv Sourasky Medical Center -- to transform patient care with new technologies and products across an array of therapeutic areas, including renal care and surgical care, respectively.
  • Achieved a regulatory milestone for our new innovative, home PD technology with the receipt of guidance from the FDA clarifying the regulatory pathway. The new system is designed to produce sterile PD solutions using a small water filtration device that would be placed in the patient’s home and integrated with Baxter’s unique AMIA automated peritoneal dialysis (APD) system with SHARESOURCE telehealth platform.
  • Launched a new version of the AK-98 HD system in select markets offering two-way IT connectivity and capabilities to meet the needs of patients with lower weights. The system can also be used to deliver HDx enabled by THERANOVA, which was designed to work with all hemodialysis machines. HDx enabled by the THERANOVA dialyzer extends the range of molecules that can be filtered from the blood during dialysis, resulting in a filtration profile that more closely mimics the natural kidney.1

2017 Financial Outlook

For full-year 2017: Baxter is raising its financial outlook for the year and now expects sales growth of approximately 3 percent on a reported basis, approximately 4 percent on a constant currency basis, and approximately 5 percent operationally. Earnings from continuing operations, before special items, are expected to be $2.34 to $2.40 per diluted share. This guidance assumes the closure of the company’s proposed acquisition of Claris Injectables, to be complete by the end of July 2017.

For the third quarter: The company expects sales growth of approximately 4 percent on a reported basis, approximately 5 percent on a constant currency basis and approximately 6...