Baxter International Inc. (BAX Quick QuoteBAX - Free Report) reported first-quarter 2022 adjusted earnings per share (EPS) of 93 cents, which outpaced the Zacks Consensus Estimate of 80 cents by 16.3%. The bottom line improved 22% from the year-ago quarter.

GAAP EPS in the quarter was 14 cents, down 76% from the prior-year quarter.

Revenue Details

Revenues of $3.71 billion surpassed the Zacks Consensus Estimate by 1.1%. The top line improved 26% year over year on a reported basis, 29% on a constant currency (cc) basis and 3% on an operational basis.

Geographical Details

Baxter reports operating results through three geographic segments — Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific).

In Americas, Baxter reported revenues of $1.63 billion, up 4% on a year-over-year basis and 5% at cc.

In EMEA, revenues totaled $699 million, down 5% from the year-ago quarter while up 2% at cc.

In APAC, revenues of $627 million declined 3% from the prior-year quarter and remained flat at cc.

Segmental Details

It is worth mentioning that in relation to the Hillrom buyout (December 2021), Baxter has added three new product categories — Patient Support Systems, Front Line Care and Surgical Solutions. During the quarter under review, Patient Support Systems reported revenues of $383 million, while Front Line Care and Surgical Solutions delivered revenues of $294 million and $78 million, respectively.

Renal Care

This segment reported revenues of $894 million in the quarter under review, down 3% from the prior-year quarter but up 1% at cc.

Medication Delivery

Revenues at the segment amounted to $706 million, up 8% from the year-ago quarter and 10% at cc.

Pharmaceuticals

Revenues at the segment totaled $521 million, down 6% from the year-ago quarter and 2% at cc.

Clinical Nutrition

Revenues at the segment were $227 million, down 3% from the year-ago quarter but up 1% at cc.

Advanced Surgery

Revenues at the segment amounted to $228 million, up 5% from the year-ago quarter and 8% at cc.

Acute Therapies

This segment reported revenues of $188 million, down 9% from the prior-year quarter and 7% at cc.

BioPharma Solutions

This segment reported revenues of $156 million, up 16% from the prior-year quarter and 21% at cc.

Other

Revenues in the segment were $32 million, up 19% on a year-over-year basis and 19% at cc.

Margin Analysis

Baxter reported adjusted gross profit of $1.67 billion in the first quarter, up 34.9% year over year. As a percentage of revenues, gross margin expanded 300 basis points (bps) to 45% in the first quarter.

Selling, general and administrative expenses amounted to $1.05 billion, up 68% from the year-ago quarter. Meanwhile, research and development expenses were $150 million, up 17% on a year-over-year basis.

Adjusted operating income rose 32.9% year over year to $666 million in the quarter under review. As a percentage of revenues, operating margin expanded 100 bps to 18% in the quarter under review.

2022 Guidance

For second-quarter 2022, the company anticipates sales to improve around 26% on a reported basis and 29% to 30%% at cc. On an operational basis, the company projects sales to increase about 4%.

For the same period, adjusted EPS is expected between 86 cents and 89 cents. The Zacks Consensus Estimate for the same is pegged at 98 cents per share.

For full-year 2022, Baxter anticipates sales growth to improve in the band of 23-24% on a reported basis, 25-26% at cc and around 3% on an operational basis.

Adjusted earnings per share is estimated in the range of $4.12 to $4.20. The Zacks Consensus Estimate for the same stands at $4.30.

Summing Up

Baxter ended first-quarter 2022 on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. The company witnessed strong performance across four of its business units. Growth in Americas and APAC is encouraging. Expansion in both gross and operating margins fuels further optimism.

With respect to business highlights during the quarter under review, regulatory approval, strategic partnership, findings of an observational study and announcement of initial investments in nine startups (participating in the mHUB Accelerator) deserve mention.

Meanwhile, cut-throat competition in the MedTech markets remains a woe. An increase in selling, general and administrative expenses is concerning. Weakness in Renal Care, Pharmaceuticals and Acute Therapies is disappointing.

Zacks Rank

Baxter currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the broader medical space that have announced quarterly results are Qiagen N.V. (QGEN Quick QuoteQGEN - Free Report) , UnitedHealth Group Incorporated (UNH Quick QuoteUNH - Free Report) and Centene Corporation (CNC Quick QuoteCNC - Free Report) .

Qiagen, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of 80 cents, which beat the Zacks Consensus Estimate by 12.7%. Revenues of $628.4 million outpaced the consensus mark by 6.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Qiagen has an estimated long-term growth rate of 11.5%. QGEN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.7%.

UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.

UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.7%.

Centene reported first-quarter 2022 adjusted EPS of $1.83, which surpassed the Zacks Consensus Estimate by 8.9%. First-quarter revenues of $37.2 billion outpaced the Zacks Consensus Estimate by 7.2%. It currently has a Zacks Rank #2.

Centene has an estimated long-term growth rate of 14.2%. CNC has an earnings yield of 6.6% compared with the industry’s 5.6%.