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Baxter (BAX) to Report Q2 Earnings: What's in the Cards?
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Baxter International Inc. (BAX - Free Report) is scheduled to release second-quarter 2024 results on Aug 6, before the opening bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.56%. BAX’s earnings beat estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 1.29%.
Q2 Estimates
Currently, the consensus estimate for revenues is pegged at $3.74 billion, indicating an improvement of 1% from the prior-year quarter’s reported figure. However, the consensus mark for earnings is pinned at 66 cents per share, implying a 20% year-over-year improvement.
Factors to Note
Baxter completed the divestment of its BioPharma Solutions (BPS) business for $4.25 billion during the third quarter of 2023. Although the divestment is part of Baxter’s restructuring initiatives to drive business growth, it is likely to have resulted in a loss of sales during the soon-to-be-reported quarter.
For the second quarter, Baxter expects sales to grow 1% on a reported basis and 2-3% at constant currency (cc). Adjusted earnings per share are expected to be between 65 cents and 67 cents.
Sustained demand and the positive impact of pricing are likely to have aided second-quarter sales for the Medical Products and Therapies segment. Infusion Therapies and Technologies sales are likely to have benefited from the IV Solutions portfolio in the international market, as well as the solid performance of the infusion system portfolio. Moreover, recent FDA approvals for Novum IQ volume infusion pump and Dose IQ Safety Software are likely to have accelerated growth for the segment.
Sales in the Pharmaceutical segment during the second quarter are expected to have been boosted by strong growth in the U.S. injectables portfolio on the back of new launches as well as continued strong demand for services within the drug compounding portfolio internationally. The launch of five injectable products in the United States in April to provide ready-to-use formulations might have brought in additional revenues.
In May, Clinolipid received the FDA approval for an expanded indication to be used in pediatric patients, including preterm and term neonates. Softness in the primary care market is likely to have hurt Front line Care sales during the second quarter. Higher backlog reductions in the prior-year quarter aided second-quarter 2023 sales, which are likely to have been absent in the soon-to-be-reported quarter.
Meanwhile, Care and Connectivity Solutions sales are anticipated to have been hurt by certain operational challenges and low capital placements due to phased product installations.
Renal Care segment sales reflected a recovering trend during the previous few quarters. The upcoming results are likely to reflect a similar trend on the back of pricing benefits and steady gains of peritoneal patients in nearly all markets. However, a potential sales decline in China due to the negative impact of various government-based procurement initiatives might have continued to hurt Renal sales.
Sales in the Acute Therapies segment is also expected to have benefited from growth in the United States and strength in the APAC region.
The company is planning to complete the divestment of Renal Care and Acute Therapies segments in the second half of 2024. It is currently in discussion with Carlyle Group for the divestment of its kidney care spinoff, Vantive, in a deal valued at more than $4 billion, including debt, and BAX may provide an update on its progress during the second quarter earnings call.
Meanwhile, ongoing transformation initiatives are likely to have enhanced operational efficiencies, which might have led to lower expenses during the quarter. However, inflationary pressure, as well as freight and supply-chain constraints, are likely to have increased cost of goods, thereby hurting the gross margin. However, these headwinds are anticipated to have been softer than those in the previously reported quarter.
Our proven model does not conclusively predict an earnings beat for Baxter this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Baxter.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Baxter currently has a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
The stock has risen 59.5% year to date. PAHC’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average negative earnings surprise of 2.30%.
Owens & Minor (OMI - Free Report) has an Earnings ESP of +1.54% and a Zacks Rank of 2 at present.
The stock fell 14.6% year to date. OMI’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 11.99%.
ResMed (RMD - Free Report) has an Earnings ESP of +2.85% and a Zacks Rank of 3 at present.
The stock has risen 16% year to date. RMD’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 2.81%.
Image: Bigstock
Baxter (BAX) to Report Q2 Earnings: What's in the Cards?
Baxter International Inc. (BAX - Free Report) is scheduled to release second-quarter 2024 results on Aug 6, before the opening bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.56%. BAX’s earnings beat estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 1.29%.
Q2 Estimates
Currently, the consensus estimate for revenues is pegged at $3.74 billion, indicating an improvement of 1% from the prior-year quarter’s reported figure. However, the consensus mark for earnings is pinned at 66 cents per share, implying a 20% year-over-year improvement.
Factors to Note
Baxter completed the divestment of its BioPharma Solutions (BPS) business for $4.25 billion during the third quarter of 2023. Although the divestment is part of Baxter’s restructuring initiatives to drive business growth, it is likely to have resulted in a loss of sales during the soon-to-be-reported quarter.
For the second quarter, Baxter expects sales to grow 1% on a reported basis and 2-3% at constant currency (cc). Adjusted earnings per share are expected to be between 65 cents and 67 cents.
Sustained demand and the positive impact of pricing are likely to have aided second-quarter sales for the Medical Products and Therapies segment. Infusion Therapies and Technologies sales are likely to have benefited from the IV Solutions portfolio in the international market, as well as the solid performance of the infusion system portfolio. Moreover, recent FDA approvals for Novum IQ volume infusion pump and Dose IQ Safety Software are likely to have accelerated growth for the segment.
Sales in the Pharmaceutical segment during the second quarter are expected to have been boosted by strong growth in the U.S. injectables portfolio on the back of new launches as well as continued strong demand for services within the drug compounding portfolio internationally. The launch of five injectable products in the United States in April to provide ready-to-use formulations might have brought in additional revenues.
In May, Clinolipid received the FDA approval for an expanded indication to be used in pediatric patients, including preterm and term neonates. Softness in the primary care market is likely to have hurt Front line Care sales during the second quarter. Higher backlog reductions in the prior-year quarter aided second-quarter 2023 sales, which are likely to have been absent in the soon-to-be-reported quarter.
Meanwhile, Care and Connectivity Solutions sales are anticipated to have been hurt by certain operational challenges and low capital placements due to phased product installations.
Renal Care segment sales reflected a recovering trend during the previous few quarters. The upcoming results are likely to reflect a similar trend on the back of pricing benefits and steady gains of peritoneal patients in nearly all markets. However, a potential sales decline in China due to the negative impact of various government-based procurement initiatives might have continued to hurt Renal sales.
Sales in the Acute Therapies segment is also expected to have benefited from growth in the United States and strength in the APAC region.
The company is planning to complete the divestment of Renal Care and Acute Therapies segments in the second half of 2024. It is currently in discussion with Carlyle Group for the divestment of its kidney care spinoff, Vantive, in a deal valued at more than $4 billion, including debt, and BAX may provide an update on its progress during the second quarter earnings call.
Meanwhile, ongoing transformation initiatives are likely to have enhanced operational efficiencies, which might have led to lower expenses during the quarter. However, inflationary pressure, as well as freight and supply-chain constraints, are likely to have increased cost of goods, thereby hurting the gross margin. However, these headwinds are anticipated to have been softer than those in the previously reported quarter.
Baxter International Inc. Price and EPS Surprise
Baxter International Inc. price-eps-surprise | Baxter International Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Baxter this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Baxter.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Baxter currently has a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
Phibro Animal Health (PAHC - Free Report) has an Earnings ESP of +0.99% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock has risen 59.5% year to date. PAHC’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average negative earnings surprise of 2.30%.
Owens & Minor (OMI - Free Report) has an Earnings ESP of +1.54% and a Zacks Rank of 2 at present.
The stock fell 14.6% year to date. OMI’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 11.99%.
ResMed (RMD - Free Report) has an Earnings ESP of +2.85% and a Zacks Rank of 3 at present.
The stock has risen 16% year to date. RMD’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 2.81%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.