New York, July 03: Baxter International Inc. said on Wednesday it would cut 2,500 jobs and miss its 2003 earnings forecast, marking the third time in four months it reduced estimates as intense competition hobbled its blood therapy business. Baxter, whose stock fell 2.2 per cent, will take a second-quarter charge of $200 million, or 30 cents per share after taxes, for plant closures and the job cuts, which represent about 5 per cent of its work force. It will close 26 blood plasma collection plants and one plasma manufacturing plant.
Plasma, an essential component of blood, is used to treat trauma victims and patients who can`t produce adequate blood because of immune disorders.
Lower prices from competitors have prevented Baxter from raising its own prices high enough to sustain earnings growth. Blood plasma prices fell as much as 40 per cent last year as new competitors, including Bayer AG , CSL Ltd. and Alpha Therapeutics, entered the U.S. market.
Baxter had hoped prices would stabilize or even rise this year.
Bureau Report