Baxter International distribution services and other business units involved in a planned spinoff ended the past quarter with a 4% sales drop and a 33% decline in earnings.
The businesses, which will become Allegiance Corp. later this year, earned $12 million on net sales of $1.09 billion in the second quarter ended June 30. By comparison, they earned $18 million on net sales of $1.13 billion in the year-ago period. They appear as discontinued operations on Baxter's earnings statement.
Baxter said it's deliberately reducing sales growth in lower-margin distributed products to increase profitability.
Meanwhile, the remaining Baxter businesses reported that net income rose 7% to $176 million, or 65 cents per share, in the quarter from $165 million, or 59 cents per share, in the year-ago period. Sales grew 5% to $1.3 billion.
The new Baxter will include biotechnology, cardiovascular, renal, intravenous systems and international sales divisions.
For the six months, Baxter net income increased 8% to $334 million, or $1.23 per share, from $310 million, or $1.11 per share, in the year-ago period. Sales rose 8% to $1.6 billion.
The Allegiance businesses saw earnings fall 18% to $27 million and sales drop 1% to $2.2 billion for the six-month period.