Jay Saccaro
Chief Financial Officer at Baxter International
Thanks, Joe, and good morning, everyone. As Joe mentioned, we're pleased with our first quarter performance especially in light of the geopolitical unrest and macroeconomic headwinds causing incremental supply chain challenges, inflationary pressures and elevated freight costs. We're working through these headwinds with consistent focus on operational efficiency and disciplined expense management.
Turning to our financial performance. First quarter 2022 global sales of $3.7 billion advanced 26% on a reported basis, 29% on a constant currency basis and 3% on an operational basis. Sales came in at the high end of our guidance range this quarter, with growth reflecting recovery in hospital admission rates and elective surgeries, the benefit from revenues associated with the manufacturing of COVID vaccines and strength in our medication delivery business, which benefited from growth of IV therapies as well as lower customer rebate costs during the quarter. On the bottom line, adjusted earnings increased 22% to $0.93 per share. This compared favorably to our guidance of $0.79 to $0.82 per share, driven by better-than-expected gross margins, which was driven by product mix as well as disciplined execution on cost synergies associated with the acquisition.
Now I'll walk through performance by our regional segments in key product categories. Note that constant currency growth is equal to operational sales growth for all global businesses and Baxter's 3 legacy geographic regions. Starting with sales by operating segment. Sales in the Americas increased 5% on a constant currency basis. Sales in Europe, Middle East and Africa grew 2% on a constant currency basis and sales in our APAC region were flat on a constant currency basis. Sales in our APAC region were negatively impacted in the quarter by the resurgence of COVID cases in the region particularly in China, we are continuing to monitor the situation in China and the potential impact on our operations from further lockdowns.
Moving on to performance by key product category. Global sales for Renal Care were $894 million, increasing 1% on a constant currency basis. Performance in the quarter was driven by growth in our PD business as global patient volumes increased on a year-over-year basis despite persistent pressures from increased mortality rates in ESRD patients delays in new patient diagnoses and market-wide staffing shortages. This growth was offset by lower dialyzer sales in our international in-center HD business. Sales in Medication Delivery of $706 million increased 10% on a constant currency basis.
Strong U.S. growth in this business reflects continued recovery in the pace of hospital admissions compared to pre-COVID levels as well as increased demand for IV administration sets and solutions. Sales also benefited from lower customer rebates in the quarter. For the quarter, we estimate that U.S. hospital admissions were down low single digits compared to pre-COVID levels. Pharmaceutical sales of $521 million declined 2% on a constant currency basis. Performance in the quarter was negatively impacted by increased competition for select molecules in our U.S. generic injectables portfolio lower sales of inhaled anesthetic and pandemic-related supply constraints driven in part by labor shortages at certain of our manufacturing facilities.
Moving to Clinical Nutrition. Total sales were $227 million, increasing 1% on a constant currency basis. Performance in the quarter was driven by the benefit of new product launches within our broad multi-chamber product offering. Sales in Advanced Surgery were $228 million, advancing 8% on a constant currency basis. Growth in the quarter reflected elective procedure recovery in the U.S. and Europe. We've seen recovery stall in our Asia Pacific region with Australia, Korea, Japan and Taiwan experiencing somewhat depressed levels of surgical volumes. In the U.S., we saw surgical procedures come under pressure in January as a result of the Omicron variant, but the impact on volumes was short-lived with procedural volumes improving into February and March.
Our current assumption is for U.S. surgical procedures in the U.S. to remain above pre-COVID levels for the remainder of the year. Sales in our Acute Therapies business were $188 million, declining 7% on a constant currency basis and reflecting a difficult comparison to the first quarter of 2021 when we experienced heightened demand for CRRT given the rise in COVID cases. BioPharma Solutions sales in the quarter were $156 million, representing growth of 21% on a constant currency basis, reflecting incremental sales related to the manufacturing of COVID vaccines, which totaled approximately $45 million in the quarter. For the remainder of the year, vaccine sales are forecasted to be approximately $60 million lower than prior year sales. Hillrom contributed $755 million in sales for the quarter, which included $383 million of sales and patient support services $294 million of sales in Frontline Care and $78 million of sales in Global Surgical Solutions.
On a constant currency basis as compared to Q1 2021, when Hillrom was a stand-alone company, its sales were flat year-over-year, reflecting a challenging comparison as sales in the first quarter of 2021 benefited from COVID-related sales of approximately $40 million.
Moving through the rest of the P&L. Our adjusted gross margin of 45% increased by 300 basis points over the prior year, reflecting the contribution of Hillrom within the quarter and lower rebate costs. Adjusted SG&A of $855 million, representing $23.1 million as a percentage of sales, an increase of 240 basis points versus prior year, driven by the addition of Hillrom as well as higher freight expenses. Adjusted R&D spending in the quarter of $149 million represented 4% as a percentage of sales, a decrease of 30 basis points versus prior year.
Increased levels of SG&A and R&D spend reflect the contribution from Hillrom. We're on track with our cost synergies target for the year, and we're able to pull forward certain initiatives resulting in a benefit to operating expenses in the first quarter. Adjusted operating margin in the first quarter was 18%, an increase of 100 basis points versus the prior year, reflecting the various factors I just discussed.
Adjusted net interest expense totaled $85 million in the quarter, an increase of $51 million versus the prior year, driven by higher outstanding debt balances related to the acquisition of Hillrom. Given the current interest rate environment, we now expect net interest expense to be higher than we had previously forecasted. Other nonoperating income totaled $16 million in the quarter, an increase of $21 million compared to the prior year period, driven by foreign exchange gains and amortization of pension benefits. The adjusted tax rate in the quarter was 20.8% as compared to 16% in the prior period. The year-over-year increase was driven by the addition of Hillrom as well as the prior year tax rate reflected a discrete benefit. The tax rate in the quarter was unfavorable to our expectations due to the mix of earnings within the quarter. And as previously mentioned, adjusted earnings of $0.93 per diluted share advanced 22% versus the prior year period.
Let me conclude my comments by discussing our outlook for the second quarter and full year 2022, including certain key assumptions around phasing for the year. As Joe mentioned earlier, we have made the decision to remove any NOVUM IQ Infusion System sales in 2022, which is reflected in our updated sales outlook.
At this time, we are not able to offset the expected NOVUM sales with Spectrum as we are supply constrained on certain electromechanical parts for the spectrum pump. In addition, the global macro disruptions emerging from new COVID outbreaks in China, the war between Russia and Ukraine and continued supply chain constraints across our network have created challenges to our ongoing operations. While we continue to evaluate opportunities to drive better efficiency in our integrated supply chain as well as pass through some of these costs to our customers. These factors have resulted in increased expenses, which are expected to negatively impact our results throughout the remainder of the year. These incremental expenses, which are primarily related to higher oil prices and increased inflationary pressures are reflected in our updated financial outlook.
For the second quarter of 2022, we expect global sales growth of approximately 26% on a reported basis, 29% to 30% on a constant currency basis and approximately 4% operationally. And we expect adjusted earnings, excluding special items, of $0.86 to $0.89 per diluted share. For full year 2022, we now expect global sales growth of 23% to 24% on a reported basis, 25% to 26% on a constant currency basis and approximately 3% on an operational basis. As mentioned earlier, operational growth for Baxter excludes the impact of foreign exchange and Hillrom.
Moving down the P&L. We expect full year adjusted operating margin to be similar to the prior year period. For the full year, we now expect interest expense to total approximately $375 million and adjusted tax rate of 19% to 19.5% and a diluted average share count of 508 million to 510 million shares. Based on these factors, we now expect 2022 adjusted earnings, excluding special items, of $4.12 to $4.20 per diluted share.
With that, we can now open the call up to Q&A.