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Baxter (BAX) to Report Q1 Earnings: What's in the Cards?
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Baxter International Inc. (BAX - Free Report) is scheduled to release first-quarter 2024 results on May 2, before the opening bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 2.33%. BAX’s earnings beat estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 5.38%.
Q1 Estimates
Currently, the consensus estimate for first-quarter revenues is pegged at $3.55 billion, indicating a decline of 2.7% from the prior-year quarter’s reported figure. However, the consensus mark for earnings is pinned at 61 cents per share, implying a 3.4% year-over-year improvement.
Factors to Note
Baxter completed the divestment of its BioPharma Solutions (BPS) business for $4.25 billion during the third quarter. Although the divestment is a part of Baxter’s restructuring initiatives to drive business growth, it is likely to have resulted in a loss of sales during the soon-to-be-reported quarter.
For the first quarter, Baxter expects sales to grow 1% on a reported basis and 1-2% at constant currency (cc). Adjusted earnings per share is expected between 59 cents and 62 cents. Earnings outlook for the quarter reflects inflationary pressure, rising interest expenses and higher tax rate.
Strong execution across commercial and manufacturing teams, coupled with new product launches and a more stable supply chain, is likely to have aided first-quarter sales for the Medical Products and Therapies segment. Meanwhile, a sequential improvement in hospital capital spending over the past couple of quarters is likely to have supported Care and Connectivity Solutions sales.
Sales in the Pharmaceutical segment during the first quarter are expected to have been boosted by strong growth in the U.S. injectables portfolio on the back of new launches as well as continued strong demand for services within the drug compounding portfolio internationally. Infusion Therapies and Technologies sales are likely to have been benefited from the IV Solutions portfolio in the international market, as well as the solid performance of the infusion system portfolio.
Renal Care segment sales reflected a recovering trend during the previous two quarters. However, a potential sales decline in China, due to the impact of various government-based procurement initiatives, might have continued to hurt Renal sales during the soon-to-be-reported quarter.
Sales in the Acute Therapies segment is also expected to have been benefited from growth in the United States and strength in the APAC region.
The company is planning to complete the divestment of Renal Care and Acute Therapies segments by July 2024, and may provide an update on its progress during the first quarter earnings call. The activities related to the divestment process are likely to have incurred higher expenses during the soon-to-be-reported quarter.
Meanwhile, ongoing transformation initiatives are likely to have enhanced operational efficiencies, which might have led to lower expenses during the quarter. However, inflationary pressure, as well as freight and supply-chain constraints, are likely to have increased the cost of goods, thereby hurting the gross margin. However, these headwinds are anticipated to have been softer than those in the prior reported quarter.
Our proven model does not conclusively predict 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. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Baxter.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Baxter currently has a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
The stock fell 14% in the past year. ZBH’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 4.99%.
Veru (VERU - Free Report) has an Earnings ESP of +8.33% and a Zacks Rank of 2 at present.
The stock fell 5.2% in the past year. VERU’s earnings met estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 7.22%.
Lantheus (LNTH - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank of 3 at present.
The stock fell 21.3% in the past year. LNTH’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 14.84%.
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Baxter (BAX) to Report Q1 Earnings: What's in the Cards?
Baxter International Inc. (BAX - Free Report) is scheduled to release first-quarter 2024 results on May 2, before the opening bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 2.33%. BAX’s earnings beat estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 5.38%.
Q1 Estimates
Currently, the consensus estimate for first-quarter revenues is pegged at $3.55 billion, indicating a decline of 2.7% from the prior-year quarter’s reported figure. However, the consensus mark for earnings is pinned at 61 cents per share, implying a 3.4% year-over-year improvement.
Factors to Note
Baxter completed the divestment of its BioPharma Solutions (BPS) business for $4.25 billion during the third quarter. Although the divestment is a part of Baxter’s restructuring initiatives to drive business growth, it is likely to have resulted in a loss of sales during the soon-to-be-reported quarter.
For the first quarter, Baxter expects sales to grow 1% on a reported basis and 1-2% at constant currency (cc). Adjusted earnings per share is expected between 59 cents and 62 cents. Earnings outlook for the quarter reflects inflationary pressure, rising interest expenses and higher tax rate.
Strong execution across commercial and manufacturing teams, coupled with new product launches and a more stable supply chain, is likely to have aided first-quarter sales for the Medical Products and Therapies segment. Meanwhile, a sequential improvement in hospital capital spending over the past couple of quarters is likely to have supported Care and Connectivity Solutions sales.
Sales in the Pharmaceutical segment during the first quarter are expected to have been boosted by strong growth in the U.S. injectables portfolio on the back of new launches as well as continued strong demand for services within the drug compounding portfolio internationally. Infusion Therapies and Technologies sales are likely to have been benefited from the IV Solutions portfolio in the international market, as well as the solid performance of the infusion system portfolio.
Renal Care segment sales reflected a recovering trend during the previous two quarters. However, a potential sales decline in China, due to the impact of various government-based procurement initiatives, might have continued to hurt Renal sales during the soon-to-be-reported quarter.
Sales in the Acute Therapies segment is also expected to have been benefited from growth in the United States and strength in the APAC region.
The company is planning to complete the divestment of Renal Care and Acute Therapies segments by July 2024, and may provide an update on its progress during the first quarter earnings call. The activities related to the divestment process are likely to have incurred higher expenses during the soon-to-be-reported quarter.
Meanwhile, ongoing transformation initiatives are likely to have enhanced operational efficiencies, which might have led to lower expenses during the quarter. However, inflationary pressure, as well as freight and supply-chain constraints, are likely to have increased the cost of goods, thereby hurting the gross margin. However, these headwinds are anticipated to have been softer than those in the prior reported quarter.
Baxter International Inc. Price and EPS Surprise
Baxter International Inc. price-eps-surprise | Baxter International Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict 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. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Baxter.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Baxter currently has a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
Zimmer Biomet (ZBH - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock fell 14% in the past year. ZBH’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 4.99%.
Veru (VERU - Free Report) has an Earnings ESP of +8.33% and a Zacks Rank of 2 at present.
The stock fell 5.2% in the past year. VERU’s earnings met estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 7.22%.
Lantheus (LNTH - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank of 3 at present.
The stock fell 21.3% in the past year. LNTH’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 14.84%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.