Baxter Reports Strong Third Quarter Sales an...( Company Raises Full-Year Outlo...),Health

Company Raises Full-Year Outlook for Third Consecutive Quarter

DEERFIELD, Ill., Oct. 18 /PRNewswire-FirstCall/ -- Baxter International Inc. (NYSE: BAX) today announced strong financial results for the period ended September 30, 2007 and raised its full-year outlook for the third consecutive quarter.

Third quarter net income of $395 million increased 6 percent compared to $374 million reported in the third quarter of 2006. Net earnings per diluted share of $0.61 increased 7 percent from $0.57 in the prior year period. These results include after-tax charges in the third quarter of 2007 totaling $63 million or $0.09 per diluted share. On an adjusted basis, excluding special items, Baxter reported net income of $458 million and net earnings per diluted share of $0.70, an increase of 22 percent and 23 percent, respectively. These results compare favorably to the earnings guidance previously provided by the company of $0.64 to $0.66 per diluted share.

In accordance with Generally Accepted Accounting Principles (GAAP), the company recorded an after-tax charge of $29 million ($0.04 per diluted share) for in-process R&D (IPR&D) associated with the company's recently announced collaborations with DEKA Research & Development Corp. and HHD, LLC, and Halozyme Therapeutics, Inc. In addition, the company's results include an after-tax charge of $34 million ($0.05 per diluted share) to establish reserves for previously disclosed Average Wholesale Pricing (AWP) litigation.

Baxter's worldwide sales totaled approximately $2.8 billion in the third quarter of 2007, an increase of 8 percent (or 4 percent excluding the impact of foreign exchange). Sales within the United States totaled $1.2 billion, an increase o
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