Back to top

Image: Bigstock

Baxter (BAX) to Report Q3 Earnings: Is a Beat in the Cards?

Read MoreHide Full Article

Baxter International Inc. (BAX - Free Report) is scheduled to release third-quarter 2022 results on Oct 27, before the opening bell. In the last reported quarter, the company delivered a negative earnings surprise of 1.14%. Its earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 6.15%.

Q3 Estimates

Currently, the Zacks Consensus Estimate for third-quarter revenues is pegged at $3.77 billion, indicating an improvement of 17% from the prior-year period. The consensus mark for earnings stands at 82 cents per share, suggesting a decline of 19.6% from the year-ago quarter.

Factors to Note

Baxter anticipates total revenues to grow by mid-teen percentage points year over year in the third quarter. However, excluding unfavorable currency impact, sales are likely to grow by mid-20s percentage points.

The recovery in rates of hospital admissions is likely to have continued in the third quarter, driving sales of Baxter’s Medication Delivery segment. Moreover, a continued rise in elective surgical procedures is likely to have fueled strong growth in Advanced Surgery sales. The Zacks Consensus Estimate for Medication Delivery segment and Advanced Surgery segment is pegged at $715 million and $261 million, respectively, for the third quarter.

However, Renal Care segment sales declined in the first half of 2022 and the trend is likely to have continued in the third quarter. The Zacks Consensus Estimate for the segment stands at $962 million.

The company has multiple collaborations to help manufacture COVID-19 vaccines. However, sales growth of the BioPharma Solutions segment is likely to have been hurt by challenging year-over-year comparisons resulting from prior-year COVID-related sales. Sales at Acute Therapies segment is also likely to have faced a similar impact in the soon-to-be-reported quarter. The Zacks Consensus Estimate for the BioPharma Solutions segment and the Acute Therapies segment is pegged at $178 million and $179 million, respectively.

Sales of the Pharmaceutical segment are likely to have been hurt by generic competition for certain molecules and supply constraints that impacted product availability. The Zacks Consensus Estimate for the segment stands at $584 million.

In the second quarter, Americas and EMEA of the company’s global regions performed weakly, hurt by unfavorable currency movements. In the Americas, Baxter reported revenues of $1.65 billion, up 1%. In EMEA, revenues totaled $738 million, down 6% from the year-ago quarter. In APAC, revenues of $647 million were down 6% year over year. The trend is likely to have continued in the soon-to-be-reported quarter.

Meanwhile, three new product categories added with the Hillrom buyout in December last year are likely to have brought additional sales during the third quarter. These product categories generated $715 million in the second quarter.

Earnings Beat Likely

Our proven model predicts 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. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (83 cents per share) and the Zacks Consensus Estimate (82 cents per share), is +1.31%.

Zacks Rank: Baxter carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

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

DexCom (DXCM - Free Report) has an Earnings ESP of +7.00% and a Zacks Rank of 1.

DexCom’s stock has declined 27.5% so far this year. DXCM missed earnings estimates in the last reported quarter. DexCom delivered a four-quarter negative earnings surprise of 3.35%, on average.

McKesson (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of 2.

McKesson’s stock has gained 41.9% so far this year. MCK beat earnings estimates in the last reported quarter. McKesson came up with a four-quarter earnings surprise of 13.00%, on average.

AmerisourceBergen has an Earnings ESP of +0.61% and a Zacks Rank of 3.

AmerisourceBergen’s stock has gained 5.8% so far this year. ABC topped earnings estimates in the last reported quarter. AmerisourceBergen delivered a four-quarter earnings surprise of 2.63%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


Baxter International Inc. (BAX) - $25 value - yours FREE >>

McKesson Corporation (MCK) - $25 value - yours FREE >>

DexCom, Inc. (DXCM) - $25 value - yours FREE >>

Published in