Baxter International ( BAX) shares fell hard Thursday after the medical equipment company said it had swung to a loss in the second quarter, would restate earnings, and guided below analysts' expectations for the rest of the year.

Baxter has a net loss of $170 million, or 28 cents a share, vs. a profit of $38 million, or 6 cents a share, in the year-ago period. The loss was driven by restructuring and other charges worth $414 million, or 68 cents a share.

Excluding items, the company earned $245 million, or 40 cents a share, matching analysts' expectations.

Revenue rose 10% to $2.4 billion, partly because of the weak dollar. Sales from Baxter's bioscience business increased 16%.

Looking ahead, the company forecast third-quarter EPS from continuing operations of 41 cents to 44 cents and fourth-quarter EPS of 54 to 58.

Baxter expects 2004 EPS from continuing operations of 96 cents to $1.03, including second-quarter changes. Otherwise, it expects EPS of $1.65 to $1.72.

The consensus estimates are for 46 cents, 63 cents and $1.80 a share, respectively.

Baxter said it plans to restate financial results for the years 2001 through 2003 and for the first quarter of 2004, which is "primarily the result of incorrect revenue recognition and inadequate provisions for bad debts in Brazil during that period." The move will decrease net income over the period by no more than $40 million, or 7 cents a share, the company said. Earnings data released Thursday does not reflect the restatement.

Baxter's restructuring costs were $394 million, or 64 cents a share in the second quarter, while the company confirmed previous forecasts that the measures will yield savings of 5 cents a share in the second half of 2004, 20 cents to 25 cents a share in 2005, and 30 cents to 35 per cents a share when fully implemented in 2006.

The restructuring includes the elimination of about 4,000 positions, or 8% of Baxter's current global workforce.

In April, the company named Robert Parkinson CEO and also replaced its CFO.

The Deerfield, Ill.-based company delivered first-quarter results that were 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.

Shares fell $3.02, or 9.4%, to $29.25.

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