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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 2021 results on Jul 29, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 18.8%.

Q2 Estimates

Currently, the Zacks Consensus Estimate for second-quarter revenues is pegged at $3.11 billion, indicating an improvement of 14.5% from the prior-year period. Meanwhile, the consensus mark for earnings stands at 74 cents per share, suggesting growth of 15.6% from the year-ago quarter.

Factors to Note

Increased demand for acute therapies products due to the COVID-19 pandemic, and continuous renal replacement therapies (CRRT), devices and associated consumables are likely to have driven Baxter’s Acute Therapies business’ second-quarter performance. The consensus mark for this segment’s revenues is pegged at $195 million, suggesting growth of 4.8% from the prior-year quarter.

In the first quarter of 2021, strength shown by the aforementioned segment drove growth across all of Baxter’s product categories. Although per management, the aforementioned heightened demand will slow down with the increase in vaccination rates and decline in COVID-related admissions.

Baxter International Inc. Price and EPS Surprise

Baxter International Inc. Price and EPS Surprise

Baxter International Inc. price-eps-surprise | Baxter International Inc. Quote

The company’s strong product portfolio, and the planned launch of therapies and products might get reflected in the second-quarter revenues.

During the first quarter of 2021, Baxter inked a deal with Moderna, Inc. for Baxter BioPharma Solutions to offer fill/finish sterile manufacturing services and supply packaging for about 60-90 million doses of the Moderna COVID-19 vaccine in 2021. This partnership follows previous agreements announced with BioNTech and Novavax to offer manufacturing services for their respective COVID-19 vaccines.

During the first quarter, the company acquired rights to specified territories outside of the United States with respect to the widely prescribed chemotherapy medication Caelyx, known as Doxil in several geographies, including the United States. This, in turn, supplements Baxter’s U.S. rights to Doxil (which was acquired in 2019).

In June, the company announced the global launch of the latest version of its next-generation platform, PrisMax 2. In the same month, it introduced the Sharesource Analytics 1.0 premium module, which is the next generation of digital health for home-based peritoneal dialysis (PD) patients.

These developments are likely to have favored the company’s performance in the to-be-reported quarter.

Global growth in both Hemodialysis (HD) and PD businesses might have contributed to higher sales with respect to Baxter’s Renal Care segment in the second quarter. The consensus mark for this segment’s revenues stands at $985 million, suggesting growth of 7.2% from the prior-year quarter.

Although Baxter’s Advanced Surgery segment witnessed a decline in revenues in the first quarter, per management we can expect quarterly sequential improvement. Therefore, the company is likely to exhibit revenue growth in the second quarter. The consensus mark for this segment’s revenues is pegged at $242 million, indicating a substantial improvement of 44% from the prior-year quarter.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is the case here as you will see below.

Earnings ESP: Baxter has an Earnings ESP of +1.01%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Baxter carries a Zacks Rank #3.

Other Stocks Worth a Look

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

HillRom Holdings, Inc. (HRC - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cerner Corporation (CERN - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank of 3.

Avanos Medical, Inc. (AVNS - Free Report) has an Earnings ESP of +15.72% and a Zacks Rank of 3.