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Baxter 1Q Earnings Drop 15 Percent

April 16, 2003

DEERFIELD, Ill. (AP) _ Baxter International Inc. profits sank 15 percent in the first quarter amid tougher competition for the medical products maker in its plasma protein business.

The results came in slightly below Wall Street’s expectations, which were lowered last month after Baxter said it would miss its sales and earnings targets.

Net earnings were $216 million, or 36 cents a share, down from $253 million, or 41 cents a share, a year earlier. Analysts polled by Thomson First Call had pegged per-share earnings at 37 cents a share.

Baxter shares, which fell this month to their lowest closing price _ $18.56 _ since November 1995 in the wake of the warning, slipped 50 cents to $19.60 in afternoon trading on the New York Stock Exchange.

Sales from continuing operations rose 6 percent to $2 billion from $1.88 billion. The company said it was not publicly releasing total sales figures. Foreign-currency fluctuations contributed to the increase, and medication-delivery sales climbed 17 percent to $850 million on strong results for intravenous therapies and drug-delivery products.

But sales in Baxter’s BioScience division declined by 11 percent in the United States on a 4 percent drop in plasma protein products, which had been its top-selling items.

Baxter also took a $13 million pretax impairment charge in the quarter to reflect the decline in market value of an investment.

Harry Jansen Kraemer Jr., chairman and chief executive officer, cited continuing price pressures in the blood products business. He said the company expects to post second-quarter earnings of 40 to 42 cents a share, short of the 47-cent consensus estimate of Wall Street analysts, but can still meet its full-year goals on the strength of upcoming product launches and expansion into new markets.

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On the Net:

www.baxter.com

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