Baxter International, Inc. (BAX Quick QuoteBAX - Free Report) is likely to gain from strong fourth-quarter results while its Other unit has been weak of late.

 

Shares of this company have rallied 9.6% compared with the industry’s 23.6% drop in a year’s time. The current level also compares unfavorably with the S&P 500 index’s 5.2% decline.

 

This $41.10-billion medical technology company currently has a Zacks Rank #3 (Hold). Baxter’s earnings are expected to grow 11.5% in the next five years. Also, the company has a trailing four-quarter positive earnings surprise of 10.6%, on average.

 

 

Let’s take a closer look at the factors that are working in favor of the company right now.

 

 

Baxter came up with fourth-quarter 2019 adjusted earnings per share (EPS) of 97 cents, which surpassed the Zacks Consensus Estimate of 88 cents by 10.2%. The bottom line also improved 36.6% from the year-ago quarter.

 

Meanwhile, revenues worth $3.04 billion matched the consensus mark and improved 7.3% year over year on a reported basis.

 

Notably, the strong show was backed by solid growth across the segments -- Renal Care, Medication Delivery, Pharmaceuticals, Clinical Nutrition, Advanced Surgery and Acute Therapies.

 

Notably, revenues across all segments rose year over year in the quarter.

 

Reflective of these, Baxter issued a strong guidance for the first quarter of 2020.

 

The company anticipates sales growth in the range of 4-5% on a reported basis, and 5-6% on both cc and operational basis.

 

Adjusted EPS are projected in the range of 72-74 cents.

 

In the fourth quarter, Baxter’s Other segment’s revenues fell 4.1% year over year and 3% at cc, reflecting headwinds in contract manufacturing services.

 

Moreover, owing to the prevailing uncertainty with respect to coronavirus, Baxter is yet to release its 2020 guidance.

 

 

For fiscal 2020, the Zacks Consensus Estimate for revenues is pegged at $11.85 billion, indicating an improvement of 4.3% year over year. For adjusted EPS, the same stands at $3.73, suggesting growth of 12.7% from the year-ago reported figure.

 

 

Some better-ranked companies in the broader medical sector are Stryker Corp. (SYK Quick QuoteSYK - Free Report) , Accuray Inc. (ARAY Quick QuoteARAY - Free Report) and IDEXX Laboratories, Inc. (IDXX Quick QuoteIDXX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Stryker’s long-term earnings growth is expected at 10.1%.

 

Accuray’s fiscal fourth-quarter earnings are expected to skyrocket 150%.

 

IDEXX Laboratories’ first-quarter earnings growth is projected at 6.8%.

 

 

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

 

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.