Baxter International said Thursday its earnings slipped in the third quarter despite improved sales, in part because of costs associated with the company’s planned separation of its bioscience unit early next year.
The Deerfield-based health care products company reported net income of $468 million and earnings per share of 86 cents for the third quarter, compared with $544 million and earnings per share of 99 cents a year earlier.
Revenue rose 13 percent to $4.2 billion, in line with expectations and boosted by an increase in international sales.
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The results reflect a $39 million charge from the integration of the company’s year-old acquisition of dialysis manufacturer Gambro, though the company had a $38 million charge last yeaer related to the same acquisition. Baxter’s planned spinoff next year of its biopharmaceuticals unit, which will be called Baxalta, incurred a $49 million charge this quarter. The company also booked an $89 million expense for legal reserves and litigation fees.
Adjusted for $273 million in what the company considers special or one-time costs, Baxter reported net income of $741 million, an increase of 9 percent from 2013. Earnings per share were $1.35, slightly more than the company’s previously issued guidance of $1.28 to $1.32. Part of the result was because of unexpected gains from investments, worth about 3 cents per share, which will be reinvested into the company.
Also in the the third quarter:
Baxter partnered with drug developer Merrimack Pharmaceuticals to make and market its pancreatic cancer drug outside the U.S. It will pay Merrimack up to $970 million, including $100 million upfront.
Baxter signed an agreement with Pfizer to sell its commercial vaccines business for $635 million.
Baxter said it will invest nearly $300 million to expand its manufacturing facility in Opelika, Ala., to make dialyzers, a product used for dialysis. Commercial production is expected to begin in 2016.
Baxter, known for its drug Advate that treats hemophilia, said it expects sales growth to remain flat next quarter when considering the impact of foreign currency and projected full year revenue growth of 10 to 11 percent.
The company anticipates earnings from continuing operations, which excludes business sales, of $3.83 to $3.86 per share for the year when including all one-time gains and losses.