Baxter International Inc Earnings: Margin Expansion Driven by Revenue Growth, Profit Rises

S&P 500 (NYSE:SPY) component Baxter International Inc (NYSE:BAX) reported its results for the fourth quarter. Baxter International is a company that develops and manufactures healthcare products that save and sustain the lives of people with chronic, acute illnesses.

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Baxter International Inc Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Baxter International Inc rose to $463 million (82 cents per share) vs. $423 million (72 cents per share) in the same quarter a year earlier. This marks a rise of 9.5% from the year earlier quarter.

Revenue: Rose 2.7% to $3.59 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: BAX fell short of the mean analyst estimate of $1.16 per share. Analysts were expecting revenue of $3.58 billion.

Quoting Management: “2011 was a very successful year for Baxter as we continue to fulfill our mission of providing innovative life-saving and life-sustaining therapies that advance patient care worldwide,” said Robert L. Parkinson, Jr., chairman and chief executive officer. “I’m pleased that despite a challenging, global macro-economic environment, our company delivered strong financial and operational performance, while accelerating investments in innovation, advancing our new product pipeline and pursuing other initiatives to enhance long-term growth, while returning significant value to our shareholders.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 7.9% to $3.48 billion in the third quarter. The figure rose 10.7% in the second quarter from the year earlier and climbed 12.2% in the first quarter from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by one cent, and in the second quarter, it was ahead by 5 cents.

Margins rose in the third quarter after falling the quarter before. Gross margin rose 2.9 percentage points to 49.1% from the quarter earlier quarter. In the second quarter, the figure rose 0.6 percentage point to 50.9% from the year earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from $1.08 per share to $1.04, indicating that analysts are growing pessisimistic about the company’s performance next quarter. In the past seven days, the average estimate for the fiscal year has declined from $4.31 per share to $4.30.

Competitors to Watch: Covidien plc (NYSE:COV), C.R. Bard, Inc. (NYSE:BCR), ICU Medical, Incorporated (NASDAQ:ICUI), Teleflex Incorporated (NYSE:TFX), Hospira, Inc. (NYSE:HSP), CryoLife, Inc. (NYSE:CRY), Becton, Dickinson and Co. (NYSE:BDX), CareFusion Corporation (NYSE:CFN), Haemonetics Corporation (NYSE:HAE), and NxStage Medical, Inc. (NASDAQ:NXTM).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com