Updated from 8:11 a.m. EDT

Baxter International ( BAX) said Thursday that it will continue cutting costs, reducing payroll and consolidating businesses to become more competitive.

The announcement came as the Deerfield, Ill.-based company issued a first-quarter financial report that was essentially in line with the consensus view on Wall Street.

Baxter earned $189 million, or 31 cents, from continuing operations and produced $2.21 billion in revenue for the three months ended March 31.

The consensus opinion of analysts polled by Thomson First Call was for earnings of $203.6, or 31 cents a share, on revenue of $2.15 billion. Baxter said the results met its earnings guidance of 28 cents to 31 cents a share.

For the same period last year, Baxter earned $217 million, or 36 cents a share, from continuing operations, on revenue of $2 billion.

"While organic sales growth was in line with our expectations, we need to take further actions to realign our cost structure in order to drive greater profitability," said Brian P. Anderson, the company's senior vice president and chief operating officer. That means Baxter will be reducing capacity in its blood plasma business and consolidating other activities "in order to drive sustainable improvements in our financial performance," Anderson said.

Apparently, Wall Street thinks Baxter needs to cut more. Baxter's stock was down 67 cents, or 2%, to $33.29 in late-morning trading. The stock dropped as low as $32.50

The company said it plans to undertake several measures, including the dismissal of 3,500 to 4,000 workers -- 7% to 8% of the workforce. Half the job cuts will take place in the United States. Anderson said Baxter also plans to reduce plasma production annually by 13% and close additional plasma collection centers.

Baxter will record an after-tax charge of $350 million to $400 million, or 55 cents to 65 cents a share, in the second quarter, primarily to reflect severance costs and closing of facilities.

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