Baxter International

Baxter International - Mixed Results Lead to Modest 3Q05 Sales and Earnings

The following is a summary of a full-length report on this topic, dated
November 22, 2005.

* Mixed Results for Three Units:
BioScience reported 12% sales improvement to $950 million driven by strong
demand for Advate, IVIG, and WinRho. In contrast, Medication Delivery sales
declined 3% and Renal sales grew a nominal 1% to $491 million, reflecting
discontinued manufacture of hemodialysis instruments.

* Modest 3Q05 Sales and Earnings Growth:
3Q05 sales grew 3.4% to $2.4 billion, which is rather modest compared to
7.9%
and 8.3% growth, respectively, in 1Q05 and 2Q05. Operating earnings
improved
2.4% to $386 million, representing 16.1% of sales and a 20 bps decline
from 3Q04.

* We Maintain Our Outperform Opinion:
We view current spread levels as cheap, in light of improved working
capital
and credit metrics, which we believe offsets sales pressure and infusion
pump
withdrawals. We maintain our Outperform opinion.