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Can Baxter (BAX) Beat Q4 Earnings on Hospital Products?
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Baxter International Inc. (BAX - Free Report) is scheduled to report fourth-quarter 2017 earnings on Feb 1, before market opens.
Last quarter, the company posted a positive earnings surprise of 8.5%. Baxter International has outperformed the Zacks Consensus Estimate in all of the preceding four quarters, the average positive beat being 10.6%. Let’s take a look at how things are shaping up prior to this announcement.
Key Catalysts
Similar to last quarter, Baxter International is expected to gain from strength in Hospital Products on solid sales in the U.S. Fluid Systems business as well as solid demand for injectable pharmaceuticals.
Within Hospital Products, in the third quarter, sales in Fluid Systems were up significantly on robust IV solution sales in the United States. We expect Fluid Systems to maintain the trend, as is evident from the Zacks Consensus Estimate of $634 million for the fourth quarter, reflecting 3.3% rise from the year-ago quarter.
Global sales of Integrated Pharmacy Solutions (IPS), another sub segment within Hospital Products, increased by a formidable margin in the third quarter, partly on the back of increased sales for premixed injectable drugs. For the fourth quarter, the Zacks Consensus Estimate for IPS is pegged at $576 million, up 2.3% from the year ago reported number.
Surgical Care (includes anesthesia and BioSurgery) sales also recorded year-over-year sales growth in the third quarter, on low double-digit growth for anesthesia and critical care products, driven by growing demand for inhaled anesthetics internationally as well as increased U.S. sales of BREVIBLOC — a fast-acting IV beta blocker. The fourth-quarter Zacks Consensus Estimate for the segment’s sales stands at$576 million, up 1.1% from the year-ago quarter.
Also, BioSurgery sales increased low-single digits globally in the last reported quarter. The company expects growth in this business to continue as a result of continuous efforts to enhance commercial effectiveness.
Overall, the Zacks Consensus Estimate for Hospital Products net sales of $1.67 billion reflects an increase of 2.6% from the year-ago quarter.
Notably, on Sep 27, 2017, Baxter announced the launch of comprehensive asset tracking solution DeviceVue. The solution will be used alongside the company’s proprietary pump system, Sigma Spectrum Infusion System. It will aid clinicians and biomedical engineers to quickly find unused pumps by viewing location and status data on PCs, iPads or iPhones. We are bullish on the development as it provides an edge to Sigma Spectrum when compared with other smart pumps in the market.
Here are the other factors that might influence Baxter’s fourth-quarter results:
Sales in Renal business grew significantly in the third quarter on the back of solid performance across all lines of the business. Taking the stellar third-quarter performance into consideration, we expect the Renal business to perform well in the yet-to-be-reported quarter as well.
On Sep 26, 2017, Baxter announced the commercial launch of a new indication for the company’s oXiris set, which can now be used to remove excessive levels of cytokines, endotoxin and other inflammatory mediators from a patient’s blood. The launch is likely to drive the top line in the yet-to-be reported quarter.
As per the company’s earlier-provided guidance, sales in the fourth quarter are expected to increase 1% to 2%. Net sales in the quarter are expected to rise 2% at constant currency. The company expects Hurricane Maria to have a negative impact on fourth-quarter revenues of around $70 million. The company also expects adjusted earnings in the range of 56 cents to 59 cents per diluted share. This includes a 6-cent negative earnings impact from Hurricane Maria, which is mitigated by an increase in the sales projections for U.S. cyclophosphamide and a lower-than-expected tax rate for the fourth quarter. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.76 billion, while the same for earnings is at 58 cents, reflecting a 1.6% increase.
However, pricing pressure continues to raise caution.
Here is what our quantitative model predicts:
Baxter has the right combination of two main ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
Zacks ESP: The Earnings ESP for Baxter International is +1.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Baxter International carries a Zacks Rank #3.
Meanwhile, the Zacks Consensus Estimate for earnings of 90 cents reflects a 20% improvement on a year-over-year basis.
Other Stocks to Consider
Here are a few other medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Myriad Genetics (MYGN - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank #3.
Henry Schein (HSIC - Free Report) has an Earnings ESP of +0.09% and a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can Baxter (BAX) Beat Q4 Earnings on Hospital Products?
Baxter International Inc. (BAX - Free Report) is scheduled to report fourth-quarter 2017 earnings on Feb 1, before market opens.
Last quarter, the company posted a positive earnings surprise of 8.5%. Baxter International has outperformed the Zacks Consensus Estimate in all of the preceding four quarters, the average positive beat being 10.6%. Let’s take a look at how things are shaping up prior to this announcement.
Key Catalysts
Similar to last quarter, Baxter International is expected to gain from strength in Hospital Products on solid sales in the U.S. Fluid Systems business as well as solid demand for injectable pharmaceuticals.
Baxter International Inc. Price and EPS Surprise
Baxter International Inc. Price and EPS Surprise | Baxter International Inc. Quote
Within Hospital Products, in the third quarter, sales in Fluid Systems were up significantly on robust IV solution sales in the United States. We expect Fluid Systems to maintain the trend, as is evident from the Zacks Consensus Estimate of $634 million for the fourth quarter, reflecting 3.3% rise from the year-ago quarter.
Global sales of Integrated Pharmacy Solutions (IPS), another sub segment within Hospital Products, increased by a formidable margin in the third quarter, partly on the back of increased sales for premixed injectable drugs. For the fourth quarter, the Zacks Consensus Estimate for IPS is pegged at $576 million, up 2.3% from the year ago reported number.
Surgical Care (includes anesthesia and BioSurgery) sales also recorded year-over-year sales growth in the third quarter, on low double-digit growth for anesthesia and critical care products, driven by growing demand for inhaled anesthetics internationally as well as increased U.S. sales of BREVIBLOC — a fast-acting IV beta blocker. The fourth-quarter Zacks Consensus Estimate for the segment’s sales stands at$576 million, up 1.1% from the year-ago quarter.
Also, BioSurgery sales increased low-single digits globally in the last reported quarter. The company expects growth in this business to continue as a result of continuous efforts to enhance commercial effectiveness.
Overall, the Zacks Consensus Estimate for Hospital Products net sales of $1.67 billion reflects an increase of 2.6% from the year-ago quarter.
Notably, on Sep 27, 2017, Baxter announced the launch of comprehensive asset tracking solution DeviceVue. The solution will be used alongside the company’s proprietary pump system, Sigma Spectrum Infusion System. It will aid clinicians and biomedical engineers to quickly find unused pumps by viewing location and status data on PCs, iPads or iPhones. We are bullish on the development as it provides an edge to Sigma Spectrum when compared with other smart pumps in the market.
Here are the other factors that might influence Baxter’s fourth-quarter results:
Sales in Renal business grew significantly in the third quarter on the back of solid performance across all lines of the business. Taking the stellar third-quarter performance into consideration, we expect the Renal business to perform well in the yet-to-be-reported quarter as well.
On Sep 26, 2017, Baxter announced the commercial launch of a new indication for the company’s oXiris set, which can now be used to remove excessive levels of cytokines, endotoxin and other inflammatory mediators from a patient’s blood. The launch is likely to drive the top line in the yet-to-be reported quarter.
As per the company’s earlier-provided guidance, sales in the fourth quarter are expected to increase 1% to 2%. Net sales in the quarter are expected to rise 2% at constant currency. The company expects Hurricane Maria to have a negative impact on fourth-quarter revenues of around $70 million. The company also expects adjusted earnings in the range of 56 cents to 59 cents per diluted share. This includes a 6-cent negative earnings impact from Hurricane Maria, which is mitigated by an increase in the sales projections for U.S. cyclophosphamide and a lower-than-expected tax rate for the fourth quarter. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.76 billion, while the same for earnings is at 58 cents, reflecting a 1.6% increase.
However, pricing pressure continues to raise caution.
Here is what our quantitative model predicts:
Baxter has the right combination of two main ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
Zacks ESP: The Earnings ESP for Baxter International is +1.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Baxter International carries a Zacks Rank #3.
Meanwhile, the Zacks Consensus Estimate for earnings of 90 cents reflects a 20% improvement on a year-over-year basis.
Other Stocks to Consider
Here are a few other medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Bio-Rad Laboratories (BIO - Free Report) has an Earnings ESP of +4.45% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Myriad Genetics (MYGN - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank #3.
Henry Schein (HSIC - Free Report) has an Earnings ESP of +0.09% and a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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