Earnings Preview: Baxter International

WASHINGTON (AP) — Specialty drug and device maker Baxter International Inc. reports its second-quarter 2009 results Thursday morning. The following is a summary of key developments and analyst commentary for the period.

OVERVIEW: Baxter announced several high-profile product launches and corporate agreements during the three month period. The company said in June it had begun full-scale production of a vaccine to protect against the swine flu. The World Health Organization has declared swine flu a global pandemic and there have been more than 37,000 swine flu cases in the U.S., with over 200 deaths.

Last week Baxter announced it would pay $3.5 million to Flamel Technologies SA as part of development deal for longer acting blood-clotting drugs. Deerfield, Ill.-based Baxter will have an exclusive right to negotiate a license to France-based Flamel's Medusa technology.

BY THE NUMBERS: In April, Baxter said it expects an adjusted profit of 93 cents to 95 cents per share for the second quarter. It also predicted sales would be weaker than a year ago because of currency exchange rates. Baxter reported $3.19 billion in sales in the year-ago quarter, and expects a decrease of a percentage in the low single digits.

Analysts polled by Thomson Reuters on average expect earnings of 94 cents per share, withrevenue of $3.12 billion. Such estimates are generally adjusted to exclude one-time items.

WHAT'S AHEAD: Baxter confirmed in June that it received a request for information from the Federal Trade Commission in connection with its review of a proposed merger between CSL and Talecris. Both of those companies compete against Baxter in the market for blood plasma. The companies canceled the merger plans last month after the FTC said it would likely block the transaction because it would reduce the number of companies in the plasma space from five to four.

Some analysts have expressed concern that FTC could be readying an investigation of the entire plasma market, including Baxter.

ANALYST TAKE: Leerink Swann analyst Rick Wise said in a research note that the publicly available documents from FTC do not suggest further regulatory action by the agency. However, he added that "a new and seemingly activist administration might pursue such issues more aggressively than in the recent past."

STOCK PERFORMANCE: Shares of Baxter rose 4.5 percent during the quarter to close at $52.96.