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Q2 2013 Earnings Call Transcript

Transcript Call Date 07/18/2013

Operator: Good morning, ladies and gentlemen, and welcome to Baxter International's Second Quarter Earnings Conference Call. Your lines will remain in a listen-only mode until the question-and-answer segment of today's call.

As a reminder, this call is being recorded by Baxter and is copyrighted material. It cannot be recorded or rebroadcast without Baxter's permission. If you have any objections, please disconnect at this time.

I would now like to turn the call over to Ms. Mary Kay Ladone, Corporate Vice President, Investor Relations at Baxter International. Ms. Ladone, you may begin.

Mary Kay Ladone - Corporate VP, IR: Thanks Sean, and good morning, everyone, and welcome to our Q2 2013 earnings conference call. Joining me today are Bob Parkinson, CEO and Chairman of Baxter International; Bob Hombach, Chief Financial Officer; and Ludwig Hantson, President, BioScience.

Before we get started, let me remind you that this presentation, including comments regarding our financial outlook, new product developments, and regulatory matters contains forward-looking statements that involve risks and uncertainties, and of course, our actual results could differ materially from our current expectations. Please refer to today's press release and our SEC filings for more detail concerning factors that could cause actual results to differ materially.

In addition, in today's call, non-GAAP financial measures will be used to help investors understand Baxter's ongoing business performance. A reconciliation of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in our earnings release issued this morning and available on our website.

Now, I'd like to turn the call over to Bob Parkinson.

Robert L. Parkinson, Jr. - Chairman and CEO: Thanks, Mary Kay. Good morning, everyone. Thank you for calling in. As you all saw in the press release that was issued earlier this morning, Baxter reported solid second quarter financial results with earnings that topped our guidance and we’ve also confirmed our outlook for the full year 2013.

In the second quarter, adjusted earnings per diluted share increased 4% to $1.16, and worldwide sales excluding currency also increased 4%.

Our financial outlook for the full year now includes sales growth of 8% to 9% on a constant currency basis and adjusted earnings of $4.62 to $4.70 per diluted share. As a reminder, our guidance does reflect the impact of the Gambro acquisition, which is expected to close in the third quarter.

While we continue to meet our financial objectives, Baxter is also advancing care across key franchises in both developed and emerging markets while focusing on innovation and R&D programs that will fuel future growth and enhance value for shareholders. This is evidenced by a number of recent commercial, operational and R&D achievements, including commencement of shipments to Hemobras in Brazil to enhance access to Baxter’s recombinant Factor VIII therapy for the treatment of hemophilia. Through this innovative partnership, Baxter will be the exclusive provider of Baxter’s recombinant or Brazil’s recombinant Factor VIII treatment over the next 10 years, while we work together on a technology transfer to support development of local manufacturing capabilities. As you may recall, we expect peak annual sales related to this partnership to exceed $200 million.

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