Baxter International Inc.

Baxter International Inc. (BAX - Analyst Report) recently reported record results for 2008, surpassing its guidance. The company also sees double-digit earnings growth in 2009.

Company Description

Baxter International develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma and other chronic and acute medical conditions.

As a global diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide. The company’s products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors’ offices, clinical and medical research laboratories, and by patients at home under physician supervision. Baxter manufactures products in 26 countries and sells them in more than 100 countries.

Quarterly Report Shows Record Growth

Baxter recently reported record results for 2008, surpassing its guidance. The company also sees double-digit earnings growth in 2009.

Fourth-quarter earnings per share of 91 cents topped the consensus estimate by 2% and came in above the year-prior 76 cents. The earnings result also eclipsed the company’s forecast of fourth-quarter earnings of 88 to 90 cents.

Worldwide sales of $3.1 billion in the fourth quarter, jumping 4% year-over-year. Excluding the impact of foreign currency, worldwide sales was 9% higher than last year and topped BAX’s guidance of about 7% growth.

“Baxter had another very successful year in 2008,” said Robert L. Parkinson, Jr., chairman and chief executive officer . “We exceeded expectations on all key financial metrics throughout the year, which illustrates the solid fundamentals underpinning our portfolio and expanded geographic reach. Despite a challenging, global macro-environment, we’re very well-positioned to continue to meet our commitments, leverage the benefits of our diversified healthcare model, and continue with our strategic priority of accelerating investment in research and development.”

Analyst Estimates are in Line with BAX’s Guidance

Baxter’s earnings outlook for 2009 ranges between $3.70 and $3.78 per share. The average analyst earnings projection calls for earnings of $3.75 per share.

BAX outpaced Wall Street estimates by an average of 4% over the past 4 consecutive quarters.

Solid Fundamentals Include a Competitive Dividend

The company’s return on equity (ROE) of 31% more than doubles the industry average of 12%.

BAX’s net profit margin of 16% is ahead of the industry average of 12%.

The company rewards shareholders with a dividend yield of 1.8%, which is well above the industry average since most companies within Baxter’s industry pay no income.

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