Baxter International Inc. reported certain preliminary operating results for the third quarter amid an internal investigation into misstatements in its previous earnings reports.
The Deerfield, Ill.-based medical-products maker said its preliminary net sales for the period rose 3% year over year to $2.85 billion. Baxter attributed the sales growth to its peritoneal dialysis and continuous renal replacement therapies, intravenous infusion systems and solutions, hemostats and sealants, and certain generic injectable pharmaceuticals.
Baxter's adjusted operating income totaled $555 million for the quarter ended Sept. 30, while reported operating income came in at $503 million.
Meanwhile, the company forecasts 3% to 4% sales growth on a reported basis for the fourth quarter.
In other news, Baxter recently launched a probe into certain intracompany transactions conducted to generate foreign exchange gains or losses. The company noted that the foreign exchange rate convention utilized in the transactions was not in line with generally accepted accounting principles, or GAAP.
Baxter's audit committee is looking into certain misstatements of non-operating income related to net foreign exchange gains for the years 2014 until the first half of 2019, but advised that the investigation is not limited to the said periods.
The probe may lead to the revision of certain items that affect operating income and were immaterial to previously reported results, Baxter added. However, the company assured that the immaterial misstatements will not affect its reported sales growth rate for the third quarter or the projected reported growth rate for the fourth quarter.
With the investigation underway, the company does not expect to file its quarterly report for the period ended Sept. 30 on a timely basis.
The healthcare company has voluntarily informed the Securities and Exchange Commission of the ongoing probe, with intentions to update the regulatory authority about its progress.
Baxter's shares were down 6.68% to $82.02 at premarket trading Oct. 24 following news of the investigation.