Baxter 2nd-quarter profit falls 9 percent as company writes down accounts in Greece

Greece woes hit Baxter International 2Q profit

DEERFIELD, Ill. — Drug and medical device maker Baxter International Inc. said Thursday its net income fell 9 percent in the second quarter because of higher costs and a settlement with the government of Greece.

Baxter said its profit slipped to $535 million, or 90 cents per share, from $587 million, or 96 cents per share. Its latest results include a write-down of $22 million, or 3 cents per share, for an expected legal settlement with the government of Greece. The company wrote down the value of some accounts because owing to Greece’s financial crisis, it does not expect to be repaid some money it is owed by the government.

According to Thomson Reuters, analysts expected a profit of 92 cents per share. Analyst estimates usually leave out one-time costs and gains.

The company said its revenue grew 2 percent to $3.19 billion from $3.12 billion, but marketing and administrative costs also rose. Analysts expected $3.19 billion, on average.

If the effects of changes in foreign currency exchange rates are excluded, Baxter’s total sales were flat.

The company said BioScience revenue fell 4 percent to $1.36 billion because of the U.S. health care reform law, which requires greater Medicaid rebates to drugmakers. Baxter also received less revenue from antibody drugs, vaccines, and hemophilia treatments.

Sales of hemophilia drug Advate and hereditary emphysema drug Aralast improved.

Medication delivery revenue rose 9 percent to $1.24 billion because of greater sales of parental nutrition products, intravenous drugs and anesthetics.

Kidney therapy revenue rose 6 percent to $585 million.

Baxter expects a profit of 96 to 99 cents per share in the third quarter. Excluding changes in currency exchange rates, sales will rise 1 to 3 percent from the $3.15 billion in reported a year earlier. Analysts forecast 98 cents per share, on average.

The company backed its full-year profit forecast of $3.93 to $3.98 per share, which excludes a charge of $588 million, or 98 cents per share, related to a recall of Baxter’s Colleague infusion pump. Sales are expected to grow 1 to 3 percent in constancy currency from the $12.56 billion in 2009.

Analysts expect a profit of $3.91 per share.

In morning trading, Baxter shares rose $1.73, or 4.1 percent, to $43.53.