October 20, 2005

Baxter International's third-quarter profit dropped 58 percent because of tax charges, but its adjusted results were slightly above Wall Street estimates.

The company's net income fell to $116 million, or 18 cents per share, for the three months ending Sept. 30, down from $276 million, or 45 cents per share, a year earlier.

Baxter's profit plummeted by $163 million, or 26 cents a share, as a result of its decision to take advantage of a tax break for repatriating foreign earnings. Costs related to Baxter's decision to stop making hemodialysis instruments also lowered earnings by $20 million, or 3 cents a share.

Excluding such items, Baxter's earnings from continuing operations were $296 million, or 47 cents per share, up from $259 million, or 42 cents per share, a year ago.

Revenue grew 3 percent to $2.4 billion from $2.32 billion, with favorable exchange rates contributing 1 percentage point. The company posted a 9 percent increase in international revenue to $1.3 billion, partly offset by a 2 percent decline in U.S. sales to $1.1 billion.

Analysts surveyed by Thomson Financial expected adjusted earnings of 46 cents per share on sales of $2.36 billion.

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