Baxter International Inc (NYSE:BAX) Q2 2019 Earnings Conference Call - Final Transcript

Jul 25, 2019 • 08:30 am ET


Baxter International Inc (NYSE:BAX) Q2 2019 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen and welcome to Baxter International's Second Quarter 2019 Earnings Conference Call. [Operator Instructions] 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. Clare Trachtman, Vice President, Investor Relations at Baxter International. Ms. Trachtman, you may begin.

Clare Trachtman

Thanks, Candace. Good morning, and welcome to our second quarter 2019 earnings conference call. Joining me today are Joe Almeida, Baxter's Chairman and Chief Executive Officer and Jay Saccaro, Baxter's Chief Financial Officer.

On the call this morning, we will be discussing Baxter's second quarter 2019 financial results and our updated financial outlook for full year 2019. A supplemental presentation to complement this morning's discussion can be accessed on our website. This presentation, along with related non-GAAP reconciliations, can be accessed on Baxter's external website in the Investors section under Events & News.

With that, let me start our prepared remarks by reminding everyone that this presentation, including comments regarding our financial outlook, new product development, business development and regulatory matters contain 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 details concerning factors that could cause results to differ materially.

In addition, on 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 is available on our website.

On the call this morning, we will be discussing operational sales growth, which adjust for the impact of foreign exchange and generic competition for cyclophosphamide in the US.

Now, I'd now like to turn the call over to Joe.

Jose Almeida

Good morning and thank you for joining us. We are pleased to share our second quarter results with you today and to discuss our updated expectations for 2019. I will begin with a quick review of our performance in the quarter and Jay will then provide more detail on the financials. We will wrap up with Q&A.

Baxter maintained it's positive trajectory in the second quarter of 2019 delivering sales growth of 4% on both a constant currency and operational basis. On the bottom line, adjusted earnings per share were $0.89, exceeding our expectations and up 16% year-over-year. Growth in the quarter was driven by topline sales performance, operational efficiency initiatives, a lower tax rate and a reduced share count. All six of our global business units contributed positively to constant currency sales growth powered in part by our revitalized innovation efforts.

On a constant currency basis, global growth in the Renal care continues to be driven by increasing patient volumes for our peritoneal dialysis products. As expected, results in the quarter