Baxter's BioScience business provides biopharmaceuticals derived
from human plasma or recombinant technology to treat hemophilia,
immune deficiencies and other blood-related disorders. It also
provides vaccines for the prevention and treatment of certain
infectious diseases, as well as biosurgery products. Baxter's
breadth and depth of expertise in recombinant protein
manufacturing, plasma fractionation, and proprietary vero cell
vaccine manufacturing technology sets it apart from others in
Baxter develops and manufactures a wide range of products for the
delivery of fluids and medications to patients. The company is
known worldwide as a leading manufacturer of intravenous (IV)
solutions, which make up 20% of Baxter's sales in the area of
medication delivery. The remainder of the revenue generated by
the Medication Delivery business comes from specialty products
that include premixed medications and drug reconstitution systems,
infusion pumps and devices used to administer IV medications to
patients; nutrition products and equipment for mixing IV
nutrition; anesthetics and delivery systems used in surgery and
critical care settings; and oncology products.
Baxter has long served the needs of people with chronic kidney
disease and end-stage renal disease (ESRD). In 1956, the company
introduced the first disposable coil dialyzer, a development that
greatly enhanced the use and application of hemodialysis (HD).
Nearly 20 years later, Baxter was one of the first companies to
introduce products and services for peritoneal dialysis (PD),
usually a home-based treatment.
Reasons To Invest
For its most recent quarter, Baxter reported strong fourth
quarter revenues from its hemophilia treatment. The company's
profits matched the market's expectations, and the firm went
on to set impressive growth goals for both sales and profits.
Baxter reported earnings of 53 cents per share for the most
recent period, while the year ago total reached 45 cents per
share in profits -- an attractive 17 percent increase. The
company reached its EPS target on sales of $2.14 billion,
which amounted to an 11 percent increase over last year's
The company said that its Bioscience and Medication Delivery
businesses should each grow by about 15 percent in the coming
year. While its Renal division is expected to grow by about
17 to 18 percent.
Baxter expects to achieve its growth in the Biosciences
division through ramping production of its hemophilia drug.
The increase in production will contribute to sales growth
starting this year through 2006.
Management is committed to increasing operational efficiency
while growing sales, which will help to boost earnings growth
in the coming years. Additionally, the company is on track
to supply consumers and the government with new treatments
for a variety of blood and immune disorders, plus cancer and
kidney diseases. For instance, the company is scheduled to
provide the U.S. government with a smallpox vaccine through
its European partnerships.
The company's recent shift away from a stodgy medical supply
company to a more technology driven provider of treatments
for disease should boost earnings and continue to attract
a premium versus other health care stocks.
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First Chicago Trust
Industry Group: Medical Products 52-week high=$58.04
Annual Dividend Per Share= 0.58 52-week low =$42.51
Last earnings 01/18 est = 0.53 actual = 0.53
Next earnings 04-20 est = 0.41 versus = 0.35
P/E = 52
Strong Buy = 0
Moderate Buy = 0
Hold = 0
Moderate Sell = 0
Strong Sell = 0