Baxter Targets Long-Term Double-Digit EPS Growth
16 September 2009 - 3:31PM
Dow Jones News
Baxter International Inc. (BAX) issued long-range financial
goals on Wednesday that continue to target double-digit earnings
growth over the next five years while the company ramps up spending
in research and development.
The maker of medical products targeting serious conditions such
as hemophilia and kidney failure is holding an all-day investor
conference Wednesday to review its financial goals and research
efforts. In a release ahead of the meeting, Baxter said it expects
to boost sales by about 7% to 8% over the next five years,
excluding the impact of foreign currency, while boosting earnings
per share by about 11% to 13%.
This outlook is similar to five-year targets announced in early
2007, and heading into the new forecasts, Credit Suisse analyst
Kristen Stewart said earnings growth at this rate "seems like a
reasonable target."
In March 2007, Baxter said that through 2011, it expected annual
sales of at least 6% to 8% and per-share earnings growth of at
least 11% to 13%.
The Deerfield, Ill., company's latest long-range forecasts also
call for generating annual cash flow of about $4 billion by 2014
and increasing investment in research and development by at least
an 8% to 10% compound annual rate.
"We believe we have a balanced outlook and are well-positioned
to achieve our results while making appropriate investments to
enhance future growth and delivering value to shareholders," Robert
L. Parkinson, Jr., the company's chairman and chief executive, said
in a release.
Shares of Baxter closed at $55.95 on Tuesday after slipping
1.7%. They are up about 4.4% on the year, however.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com