CHICAGO (Reuters) - Baxter International Inc <BAX.N> reported on Thursday quarterly profit rose 6 percent, but another delay in getting its Colleague infusion pump back on the U.S. market weighed on its shares.
Baxter, which also makes medication delivery systems and products used for kidney therapy, raised its profit outlook for the full year. The improved forecast comes despite slow progress on Colleague, which delivers medication and fluids into the bloodstream, in the wake of recalls two years ago.
The company previously said the device would be back on the U.S. market in the second half of 2008.
Better gross margins, firmer pricing on most products, greater manufacturing efficiencies and favorable foreign exchange translations also bolstered results.
Chief Executive Robert Parkinson told analysts on a conference call he expected continued improvements in margins for the foreseeable future.
First-quarter net earnings were $429 million, or 67 cents per share, compared with $403 million, or 61 cents per share, a year ago.
Results include an after-tax charge of $45 million for costs associated with the company's Colleague infusion pump remediation program and costs related to its recall of heparin blood thinner in the United States.
Excluding that charge, Baxter earned 74 cents per share.
On that basis, analysts on average expected a profit of 72 cents per share, according to Reuters Estimates.
Its investment in research and development of $190 million increased 19 percent in the first quarter.
First-quarter revenue rose 8 percent to $2.9 billion from a year ago, led by a 13 percent increase in sales in Baxter's Bioscience business, which makes, among other things, blood therapy products.
Excluding the impact of foreign exchange and revenue from Transfusion Therapies, which was divested in the first quarter of 2007, sales rose 4 percent.
Deerfield, Illinois-based Baxter said it expects 2008 earnings per share of $3.18 to $3.24, before one-time items, up from its previous forecast of $3.10 to $3.18 per share, excluding items.
The company also slashed its forecast for Colleague sales for the year to $30 million from $75 million. The $30 million represents replacement pump sales to existing U.S. customers.
Baxter continues to expect sales growth, excluding the impact of foreign exchange, of 5 percent to 6 percent.
Excluding both Transfusion Therapies and foreign exchange, the company expects sales growth of about 6 percent to 7 percent.
For the second quarter, Baxter predicted sales growth of 4 to 5 percent, excluding the impact of foreign exchange, and earnings per share, before items, of 81 to 83 cents.
Shares of Baxter were down 68 cents to $59.75 in early New York Stock Exchange trade.
(Reporting by Debra Sherman; Editing by Steve Orlofsky)
