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Baxter International Inc. (BAX - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) from continuing operations of 68 cents, which beat the Zacks Consensus Estimate of 66 cents by 3%. The bottom line improved 23.6% from the year-ago quarter’s level.
On a GAAP basis, the company reported a loss per share of 62 cents from continuing operations compared with a loss of 39 cents in the prior-year quarter.
Continuing operations exclude Baxter's BioPharma Solutions business, which was divested during the third quarter of 2023.
Revenue Details
Revenues from continued operation totaled $3.81 billion, up 3% on a reported basis and 4% at constant currency (cc). The figure beat the Zacks Consensus Estimate by 1.9%.
Shares of BAX were up 3.9% in pre-market trading following better-than-expected quarterly results. The company’s shares have declined 10.3% year to date against the industry’s growth of 3.2%. The broader S&P 500 Index has moved up 9% in the same period.
Image Source: Zacks Investment Research
Segmental Details
As part of its transformation plan announced in February 2023, Baxter established its new operating model, integrating its prior matrixed structure of nine businesses operating across three geographic regions into the aforementioned four verticalized global segments. The company started reporting under a new model since the third quarter of 2023.
Medical Products & Therapies
The segment includes Advanced Surgery and a new category, Infusion Therapies & Technologies. Total sales at this segment totaled $1.32 billion, up 4% year over year reportedly and 5% at cc. The growth reflects the benefits of positive demand and pricing across a wide range of products, along with additional sales from the recently launched Novum IQ large-volume infusion pump with Dose IQ Safety Software.
Infusion Therapies and Technologies’ sales totaled $1.05 billion, up 4% year over year reportedly and 5% at cc. Advanced Surgery category sales amounted to $277 million, up 2% year over year reportedly and 4% at cc.
Healthcare Systems and Technologies
The segment includes the Front Line Care category. It also includes the Patient Support Systems and Surgical Solutions categories, which are clubbed as Care & Connectivity Solutions. Total sales in this segment were $748 million, up 1% year over year reportedly as well as at cc. The growth was led by higher demand for Care & Connectivity Solutions products, especially from the Patient Support Systems portfolio. However, soft demand in the U.S. primary care market continued to hurt Front Line Care sales, partially offsetting growth from Care & Connectivity Solutions products.
Front Line Care category sales totaled $296 million, down 4% year over year reportedly as well as at cc. Care & Connectivity Solutions category sales amounted to $452 million, up 4% year over year reportedly as well as at cc.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the second quarter were $602 million, up 9% year over year reportedly and 11% at cc. The growth was primarily driven by new product launches and robust demand for Baxter's Drug Compounding services.
Injectables and Anesthesia category sales totaled $341 million, up 3% year over year reportedly and 4% at cc. The Drug Compounding category sales amounted to $261 million, up 20% year over year reportedly as well as at cc.
Kidney Care
This segment includes BAX’s Renal Care category, which is now reported under the Chronic Therapies category. It also includes the Acute Therapies category. Total sales in this segment were $1.12 billion, flat year over year reportedly but up 3% at cc.
The growth in sales was driven by positive pricing and demand for Acute Therapies and Peritoneal Dialysis products. This was partially offset by a decline in sales of in-center hemodialysis products due to select product and market exits.
Chronic Therapies category sales totaled $917 million, down 1% year over year reportedly but up 1% at cc. Acute Therapies category sales amounted to $201 million, up 7% year over year reportedly and 9% at cc.
Baxter plans to spin off this segment, which will trade as an independent, publicly traded company under the proposed trade name of Vantive. The spin-off is expected to be completed by late 2024 or early 2025.
Other
Revenues in the segment amounted to $22 million, flat on a year-over-year basis but down 5% at cc.
Baxter International Inc. Price, Consensus and EPS Surprise
Baxter reported an adjusted gross profit of $1.57 billion, up 4.7% year over year. As a percentage of revenues, the adjusted gross margin improved 70 basis points (bps) to 41.2%.
Selling, general and administrative expenses amounted to $1.02 billion, up 5.9% from the year-ago quarter’s figure. Research and development expenses totaled $173 million, up 4.8% on a year-over-year basis.
Adjusted operating income from continuing operations totaled $522 million, up 6.7% year over year. As a percentage of revenues, the adjusted operating margin improved 50 bps to 13.7%.
2024 Guidance
For third-quarter 2024, Baxter anticipates sales to grow 3-4% on a reported basis and 4-5% at cc. The Zacks Consensus Estimate for sales is pegged at $3.79 billion, implying year-over-year growth of 2.1% reportedly.
Adjusted EPS is expected to be between 77 cents and 79 cents, and the Zacks Consensus Estimate for the same is pegged at 75 cents.
For full-year 2024, sales growth is expected to be 3% on a reported basis as well as at cc. The Zacks Consensus Estimate for the metric is pegged at $15.1 billion, implying a year-over-year improvement of 1.1% reportedly. Adjusted EPS is projected to be in the band of $2.93-$3.01, up from the previous guidance of $2.88-$2.98. The Zacks Consensus Estimate for the same is pegged at $2.91 billion.
Zacks Rank and Stocks to Consider
Currently, Baxter carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation (BSX - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report) .
Boston Scientific reported second-quarter 2024 adjusted EPS of 62 cents, which beat the Zacks Consensus Estimate by 6.9%. Revenues of $4.12 billion surpassed the Zacks Consensus Estimate by 2.5%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.
Hologic, carrying a Zacks Rank of 2 at present, has a long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.50%.
Hologic reported second-quarter 2024 adjusted EPS of $1.06, which beat the Zacks Consensus Estimate by 3.9%. Revenues of $1 billion surpassed the Zacks Consensus Estimate by 1.1%.
Universal Health Services reported second-quarter 2024 adjusted EPS of $4.31, which beat the Zacks Consensus Estimate by 27.9%. Revenues of $3.9 billion surpassed the Zacks Consensus Estimate by 1.5%.
Universal Health Services has a long-term growth rate of 18%. UHS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.
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Baxter (BAX) Q2 Earnings Beat Estimates, '24 EPS View Raised
Baxter International Inc. (BAX - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) from continuing operations of 68 cents, which beat the Zacks Consensus Estimate of 66 cents by 3%. The bottom line improved 23.6% from the year-ago quarter’s level.
On a GAAP basis, the company reported a loss per share of 62 cents from continuing operations compared with a loss of 39 cents in the prior-year quarter.
Continuing operations exclude Baxter's BioPharma Solutions business, which was divested during the third quarter of 2023.
Revenue Details
Revenues from continued operation totaled $3.81 billion, up 3% on a reported basis and 4% at constant currency (cc). The figure beat the Zacks Consensus Estimate by 1.9%.
Shares of BAX were up 3.9% in pre-market trading following better-than-expected quarterly results. The company’s shares have declined 10.3% year to date against the industry’s growth of 3.2%. The broader S&P 500 Index has moved up 9% in the same period.
Image Source: Zacks Investment Research
Segmental Details
As part of its transformation plan announced in February 2023, Baxter established its new operating model, integrating its prior matrixed structure of nine businesses operating across three geographic regions into the aforementioned four verticalized global segments. The company started reporting under a new model since the third quarter of 2023.
Medical Products & Therapies
The segment includes Advanced Surgery and a new category, Infusion Therapies & Technologies. Total sales at this segment totaled $1.32 billion, up 4% year over year reportedly and 5% at cc. The growth reflects the benefits of positive demand and pricing across a wide range of products, along with additional sales from the recently launched Novum IQ large-volume infusion pump with Dose IQ Safety Software.
Infusion Therapies and Technologies’ sales totaled $1.05 billion, up 4% year over year reportedly and 5% at cc. Advanced Surgery category sales amounted to $277 million, up 2% year over year reportedly and 4% at cc.
Healthcare Systems and Technologies
The segment includes the Front Line Care category. It also includes the Patient Support Systems and Surgical Solutions categories, which are clubbed as Care & Connectivity Solutions. Total sales in this segment were $748 million, up 1% year over year reportedly as well as at cc. The growth was led by higher demand for Care & Connectivity Solutions products, especially from the Patient Support Systems portfolio. However, soft demand in the U.S. primary care market continued to hurt Front Line Care sales, partially offsetting growth from Care & Connectivity Solutions products.
Front Line Care category sales totaled $296 million, down 4% year over year reportedly as well as at cc. Care & Connectivity Solutions category sales amounted to $452 million, up 4% year over year reportedly as well as at cc.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the second quarter were $602 million, up 9% year over year reportedly and 11% at cc. The growth was primarily driven by new product launches and robust demand for Baxter's Drug Compounding services.
Injectables and Anesthesia category sales totaled $341 million, up 3% year over year reportedly and 4% at cc. The Drug Compounding category sales amounted to $261 million, up 20% year over year reportedly as well as at cc.
Kidney Care
This segment includes BAX’s Renal Care category, which is now reported under the Chronic Therapies category. It also includes the Acute Therapies category. Total sales in this segment were $1.12 billion, flat year over year reportedly but up 3% at cc.
The growth in sales was driven by positive pricing and demand for Acute Therapies and Peritoneal Dialysis products. This was partially offset by a decline in sales of in-center hemodialysis products due to select product and market exits.
Chronic Therapies category sales totaled $917 million, down 1% year over year reportedly but up 1% at cc. Acute Therapies category sales amounted to $201 million, up 7% year over year reportedly and 9% at cc.
Baxter plans to spin off this segment, which will trade as an independent, publicly traded company under the proposed trade name of Vantive. The spin-off is expected to be completed by late 2024 or early 2025.
Other
Revenues in the segment amounted to $22 million, flat on a year-over-year basis but down 5% at cc.
Baxter International Inc. Price, Consensus and EPS Surprise
Baxter International Inc. price-consensus-eps-surprise-chart | Baxter International Inc. Quote
Margin Analysis
Baxter reported an adjusted gross profit of $1.57 billion, up 4.7% year over year. As a percentage of revenues, the adjusted gross margin improved 70 basis points (bps) to 41.2%.
Selling, general and administrative expenses amounted to $1.02 billion, up 5.9% from the year-ago quarter’s figure. Research and development expenses totaled $173 million, up 4.8% on a year-over-year basis.
Adjusted operating income from continuing operations totaled $522 million, up 6.7% year over year. As a percentage of revenues, the adjusted operating margin improved 50 bps to 13.7%.
2024 Guidance
For third-quarter 2024, Baxter anticipates sales to grow 3-4% on a reported basis and 4-5% at cc. The Zacks Consensus Estimate for sales is pegged at $3.79 billion, implying year-over-year growth of 2.1% reportedly.
Adjusted EPS is expected to be between 77 cents and 79 cents, and the Zacks Consensus Estimate for the same is pegged at 75 cents.
For full-year 2024, sales growth is expected to be 3% on a reported basis as well as at cc. The Zacks Consensus Estimate for the metric is pegged at $15.1 billion, implying a year-over-year improvement of 1.1% reportedly. Adjusted EPS is projected to be in the band of $2.93-$3.01, up from the previous guidance of $2.88-$2.98. The Zacks Consensus Estimate for the same is pegged at $2.91 billion.
Zacks Rank and Stocks to Consider
Currently, Baxter carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation (BSX - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report) .
Boston Scientific reported second-quarter 2024 adjusted EPS of 62 cents, which beat the Zacks Consensus Estimate by 6.9%. Revenues of $4.12 billion surpassed the Zacks Consensus Estimate by 2.5%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.
Hologic, carrying a Zacks Rank of 2 at present, has a long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.50%.
Hologic reported second-quarter 2024 adjusted EPS of $1.06, which beat the Zacks Consensus Estimate by 3.9%. Revenues of $1 billion surpassed the Zacks Consensus Estimate by 1.1%.
Universal Health Services reported second-quarter 2024 adjusted EPS of $4.31, which beat the Zacks Consensus Estimate by 27.9%. Revenues of $3.9 billion surpassed the Zacks Consensus Estimate by 1.5%.
Universal Health Services has a long-term growth rate of 18%. UHS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.