Tags: Baxter | International | Healthcare | BAX

Baxter International Rebounds in Healthcare

By    |   Tuesday, 03 May 2011 02:05 PM

Healthcare is a booming field, and Baxter International (BAX) is one of the strongest companies in the sector. It provides injectable therapies for an array of sicknesses, and it has a bioscience unit that’s working on treatments for ailments such as hemophilia and immune deficiencies.

Baxter offers a range of medication delivery regimes, including intravenous bags, solutions, and other devices to regulate fluid inflow, including dialysis equipment and solutions to treat kidney failure. The company’s stock represents an attractive healthcare investment opportunity.

Baxter reported profit of $577 million in the first quarter, reversing a loss of $60 million a year earlier, when the company had to charge off $588 million, mostly due to a recall of Colleague infusion pumps. Revenue gained 12 percent to $3.28 billion from $2.93 billion.

Baxter raised its 2011 profit forecast to between $4.20 and $4.28 per share, up from its prior estimate of between $4.15 and $4.25.

Baxter benefits from its regular purchases of smaller companies. In April, Baxter agreed to buy privately held Prism Pharmaceuticals for up to $338 million, adding to its staple of pre-mixed drugs. Last November, Baxter agreed to pay $30 million for the hemophilia-related assets of privately held Archemix for up to $315 million.

The company is in a strong position, says its CEO Robert Parkinson. "We continue to implement measures to improve our commercial, operational, and scientific effectiveness in response to an evolving and challenging environment," he said in a statement accompanying the latest earnings report.

"Baxter's strong financial position provides us the flexibility to invest in and pursue opportunities that expand our diverse product portfolio with innovative products that save and sustain patient lives and position our company for enhanced growth."

A Value Stock Opportunity

Analysts say the company is delivering. “Overall earnings quality was solid,” in the first quarter, JPMorgan Chase analyst Michael Weinstein wrote after the report.

Analysts at Zacks Investment Research called Baxter “a good bet for value investors willing to wait as fundamentals improve,” referring to the affordability problem in healthcare. “The company is able to generate recurring revenues, and consistent cash flow, due to its focus on chronic diseases,” they wrote.

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Healthcare is a booming field, and Baxter International (BAX) is one of the strongest companies in the sector. It provides injectable therapies for an array of sicknesses, and it has a bioscience unit that s working on treatments for ailments such as hemophilia and immune...
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2011-05-03
Tuesday, 03 May 2011 02:05 PM
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