Baxter has beaten analysts’ forecasts with second quarter profits of $431 million, an increase of 39% over the $309 million reported in the same period last year, and 5 cents above the 67 cents a share analysts had been anticipating. The company’s positive results were helped by widening profit margins and continued strong sales of its Advate treatment for haemophilia A.

Earnings for Baxter's flagship bioscience biopharmaceutical unit grew 20% to $1.2 billion, helped by sales of Advate and antibody therapy products for treating primary immunodeficiencies.

Other factors that helped Baxter achieve strong growth were a tax benefit, and restructuring charges, that allowed the company to pay $12 million less in income tax in the latest quarter, even though its profits were substantially higher; and interest income of $1 million. This follows an interest payment of $10 million in the same quarter last year.

Favorable currency exchange rates also helped Baxter's sales growth of 7%, which on a constant-currency basis would have been a much smaller 3%.

On a less favourable note, the Food and Drug Administration this week classified Baxter’s field corrective action regarding recently manufactured or upgraded Colleague triple channel infusion pumps as a Class I recall, which is generally designated for dangerous or defective products that could cause serious health problems or death. The company has identified a processing anomaly related to buffer overflow that occurs in specific situations. Baxter has received reports of 16 serious injuries associated with this issue at nine US customer accounts.

“Even though we did catch it early, nonetheless it is a significant disappointment,” chairman and CEO Robert L Parkinson Jr told analysts on a conference call. “We can't afford to screw up again, and I don't think we will.”