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Baxter (BAX) to Report Q1 Earnings: What's in the Cards?

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Baxter International Inc. (BAX - Free Report) is scheduled to release first-quarter 2021 results on Apr 29, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 5.3%.

Q1 Estimates

Currently, the Zacks Consensus Estimate for first-quarter revenues is pegged at $2.89 billion, indicating an improvement of 2.9% from the prior-year period. Meanwhile, the consensus mark for earnings stands at 64 cents per share, suggesting a decline of 21.9% from the year-ago quarter.

Factors to Note

Increased demand for acute therapies products due to the COVID-19 pandemic, and continuous renal replacement therapies (CRRT), devices and associated consumables are likely to have driven Baxter’s Acute Therapies business’ first-quarter performance. In fact, the consensus mark for this segment’s revenues is pegged at $183 million, suggesting growth of 17.3% from the prior-year quarter.

Moreover, the company’s strong product portfolio, and the planned launch of therapies and products might get reflected in the first-quarter revenues.

Further, growing demand for Baxter’s Evo IQ Infusion System may have positively impacted the first-quarter performance.

Baxter International Inc. Price and EPS Surprise

Baxter International Inc. Price and EPS Surprise

Baxter International Inc. price-eps-surprise | Baxter International Inc. Quote

Rising demand of its hospital pharmacy compounding services, generic injectables and anesthesia products is likely to have contributed to its international sales.

Global growth in both Hemodialysis (HD) and peritoneal dialysis (PD) businesses might have contributed to higher sales with respect to Baxter’s Renal Care segment in the first quarter. In fact, the consensus mark for this segment’s revenues stands at $928 million, suggesting growth of 6.7% from the prior-year quarter.

In November 2020, Baxter attained FDA approval for the Homechoice Claria automated peritoneal dialysis (APD) system with Sharesource connectivity platform. It is worth mentioning that the clearance comes on the heels of the finalization of the End-Stage Renal Disease (ESRD) Treatment Choices (ETC) payment model, the goal of which is to drastically increase the number of new patients with kidney failure who receive home dialysis and/or organ transplants.

Last December, Baxter collaborated with AdventHealth Tampa to develop customized hemostasis strategies that can aid in the latter’s clinical, operational and financial goals. This has been made possible with the help of Baxter’s Vital Edge program. Notably, Vital Edge is a data-backed, evidence-based intraoperative hemostasis management program that has been created to enable hospitals and health care providers to boost hemostasis utilization practices.

These developments are likely to have favored the company’s performance in the to-be-reported quarter.

In fourth-quarter 2020, Baxter reported $260 million (up 12.5% on a year-over-year basis and 10% at constant currency) with respect to its Advanced Surgery segment. This momentum is likely to have continued in the soon-to-be-reported quarter driven by benefits obtained from the Seprafilm buyout. In fact, the consensus mark for this segment’s revenues is pegged at $227 million, indicating an improvement of 1.3% from the prior-year quarter.

However, it is important to mention that surgical procedures remain below pre-COVID levels worldwide. Moreover, resurgence in cases might have weighed on Baxter’s first-quarter performance.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is the case here as you will see below.

Earnings ESP: Baxter has an Earnings ESP of +1.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Baxter carries a Zacks Rank #3.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

Thermo Fisher Scientific Inc. (TMO - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

AmerisourceBergen Corporation has an Earnings ESP of +0.23% and a Zacks Rank of 3.

Zimmer Biomet Holdings, Inc. (ZBH - Free Report) has an Earnings ESP of +1.92% and a Zacks Rank of 3.

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