Baxter International Recalls Peritoneal Dialysis Solution - Analyst Blog
08 March 2014 - 7:00AM
Zacks
Baxter International Inc. (BAX) recalled a
single lot of Dianeal PD-2 peritoneal dialysis solution with 1.5%
dextrose 6000 mL (Ambu-Flex II) after receiving reports about the
presence of a particulate matter, known as mold, resulting from a
leak in the container. The news had a negative reaction on the
market as shares of the company slid 0.5% to close at $67.57
yesterday.
Contamination of a solution with mold could lead to
life-threatening fungal peritoneal infection or sepsis upon its
intraperitoneal (IP) administration. The affected lot is C903799,
with expiration date of May 2015, product code of L5B9710, and
national drug code of 00941-0411-11.
Baxter distributed the product to dialysis centers, facilities,
distributors, and patients in the U.S. between May 2013 and Jan
2014. It was packaged in flexible plastic containers.
Baxter sent a recall letter to customers requesting them to locate
and remove the affected product from their facility. The company
also sent a recall letter to patients, who received product from
the affected lot, asking them to return it.
Baxter posted a marginal 1.1% fall in adjusted net earnings to $692
million in the fourth quarter of 2013 from $700 million in the
year-ago quarter. However, on per share basis, adjusted net
earnings were flat at $1.26 compared with the year-ago level but
beat the Zacks Consensus Estimate by a penny.
For full year 2013, net earnings inched up 2.0% to $2,567 million
from $2,516 million a year ago. On per share basis, net earnings
rose 3.1% to $4.67 from $4.53 in 2012 and were in line with the
Zacks Consensus Estimate.
Revenues for the quarter went up 16.4% to $4,368 million globally
and exceeded the Zacks Consensus Estimate of $4,249 million.
Excluding the contribution from Gambro, revenues in the quarter
grew 5% to $4.0 billion (or 6% excluding the impact of foreign
currency).
For the first quarter of 2014, Baxter expects sales to grow between
13 and 14%, barring the impact of foreign currency. The company
also expects adjusted earnings in the range of $1.06 to $1.09 per
share in the quarter. The current Zacks Consensus Estimate for
2014-first quarter earnings is pegged at $1.09.
For full year 2014, BAX anticipates sales growth in the range of 9
to 10%, excluding the impact of foreign exchange. The company also
expects adjusted earnings between $5.05 and $5.25 per share and
operating cash flow of $3.5 billion for the year. The current Zacks
Consensus Estimate of $5.13 for 2014 earnings lies within the
guided range.
Currently, Baxter has a Zacks Rank #3 (Hold). Some better-ranked
stocks in the medical products industry include Enzymotec
Ltd. (ENZY), Covidien plc (COV), and
Stryker Corporation (SYK). Enzymotec retains a
Zacks Rank #1 (Strong Buy), while both Covidien and Stryker carry a
Zacks Rank #2 (Buy).
BAXTER INTL (BAX): Free Stock Analysis Report
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