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Baxter International Inc. (BAX - Free Report) reported fourth-quarter 2024 adjusted earnings per share (EPS) of 58 cents, which beat the Zacks Consensus Estimate of 52 cents by 11.5%. The bottom line declined 10.8% from the year-ago quarter’s level due to a surge in costs and expenses.
On a GAAP basis, the company reported a loss per share of 95 cents against EPS of 43 cents in the prior-year quarter. The significant loss was due to special items, primarily related to the impact of a Front Line Care goodwill impairment charge, business optimization costs, Hurricane Helene costs and separation-related costs.
The company reported adjusted EPS from continuing operations, Medical Products & Therapies, Healthcare Systems & Technologies and Pharmaceuticals segments of 49 cents compared with 43 cents in the year-ago period.
Revenues from continued operations totaled $2.75 billion, up 0.9% on a reported basis and 2% at constant currency (cc). The figure beat the Zacks Consensus Estimate by 3.4%.
Shares of BAX were up 8.4% in pre-market trading following better-than-expected quarterly results. The company’s shares have lost 14.8% in the past six months against the industry’s growth of 9.2%. The broader S&P 500 Index has moved up 10% in the same period.
Image Source: Zacks Investment Research
Segmental Details
Baxter completed its transformation plan, announced in February 2023, with the completion of the sale of its Kidney Care business last month. The company expects its streamlined businesses to offer new opportunities to redefine healthcare delivery and drive profitable growth.
As part of its transformation plan, Baxter established its new operating model, integrating its prior matrixed structure of nine businesses (operating across three geographic regions) into the aforementioned four verticalized global segments. The company started reporting under a new model since the third quarter of 2023.
Medical Products & Therapies
The segment includes Advanced Surgery and a new category, Infusion Therapies & Technologies. Total sales at this segment totaled $1.31 billion, nearly flat year over year reportedly but up 1% at cc. Growth from robust sales of the Novum IQ infusion pump, parenteral nutrition products and Advanced Surgery products was partially offset by reduced sales of IV solutions due to the impact of Hurricane Helene.
Infusion Therapies and Technologies’ sales totaled $1.02 billion, down 2% year over year reportedly and 1% at cc. Advanced Surgery category sales amounted to $292 million, up 5% year over year reportedly and 6% at cc.
Healthcare Systems and Technologies
The segment includes the Front Line Care category. It also includes the Patient Support Systems and Surgical Solutions categories, which are clubbed as Care & Connectivity Solutions. Total sales in this segment were $784 million, down 1% year over year reportedly as well as at cc. Sales were driven by new sales and upgrades for patient support systems, which were more than offset by certain supply constraints and exits from select markets or product categories.
Front Line Care category sales totaled $280 million, down 8% year over year reportedly as well as at cc. Care & Connectivity Solutions category sales amounted to $504 million, up 2% year over year reportedly and 3% at cc.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the fourth quarter were $643 million, up 8% year over year reportedly as well as at cc. The growth was primarily driven by robust demand for Baxter's Drug Compounding services, along with strong growth in specialty injectables and additional sales from new launches.
Injectables and Anesthesia category sales totaled $383 million, up 7% year over year reportedly and 8% at cc. The Drug Compounding category sales amounted to $260 million, up 10% year over year reportedly and 9% at cc.
Other
Revenues in the segment amounted to $12 million, down 33% on a year-over-year basis as well as at cc.
Margin Analysis
Baxter reported an adjusted gross profit of $1.23 billion, up 0.7% year over year. As a percentage of revenues, the adjusted gross margin contracted 10 basis points (bps) to 44.5%.
Selling, general and administrative expenses amounted to $761 million, up 11.4% from the year-ago quarter’s figure. Research and development expenses totaled $211 million, up 66.1% on a year-over-year basis.
Adjusted operating income from continuing operations totaled $297 million, down 10% year over year. As a percentage of revenues, the adjusted operating margin declined 130 bps to 10.8%.
2025 Guidance
Baxter issued its guidance for first-quarter and full-year 2025.
For the first quarter, Baxter anticipates sales from continuing operations to grow 3-4% reportedly and 4% on an operational basis. The adjusted EPS for the period is expected to be in the range of 47-50 cents. The Zacks Consensus Estimate for sales and EPS is pegged at $2.62 billion and 52 cents, respectively.
For full-year 2025, continuing operational sales growth is expected to be 5-6% reportedly and 4-5% on an operational basis. The Zacks Consensus Estimate for the metric is pegged at $11.24 billion, implying a year-over-year improvement of 6.5% reportedly. Adjusted EPS is projected to be in the band of $2.45-$2.55. The Zacks Consensus Estimate is pegged at $2.47.
Baxter International Inc. Price, Consensus and EPS Surprise
Baxter exited the fourth quarter on a strong note, with both earnings and sales beating estimates. Although declining margins remain a concern, the metric is expected to improve going forward following the transformational plan, which included the spin-off of Kidney Care and BioPharma Solutions businesses. The plan also included a simplified model with a faster and more effective response to macro and micro changes and an enhanced ability to advance innovation for its patients.
The $3.4 billion divestiture of its Kidney Care business, alongside the earlier sale of BioPharma Solutions and a shift to a vertical operating model, enhances operational efficiency and financial flexibility. BAX plans to use the proceeds from the sale to reduce debt. With a lower debt burden and improved cash flow, Baxter is poised to accelerate innovation and expand in core healthcare segments. Leadership transitions, including the appointment of a new CEO, should shape the next phase of strategic execution, driving sustainable growth and long-term value creation in the years ahead.
Baxter’s rapid recovery from Hurricane Helene ensures minimal disruption in 2025. With all manufacturing lines at North Cove restored to pre-hurricane levels, supply continuity is secured. Strong crisis management, infrastructure resilience and proactive coordination with stakeholders position Baxter for stable operations and uninterrupted growth in the coming year.
BAX’s recent product launches and FDA approvals position it for strong growth in 2025 and beyond. The Novum IQ infusion pumps enhance hospital efficiency, while Clinolipid’s expanded indication broadens Baxter’s impact on pediatric nutrition. The Vest APX airway clearance system improves respiratory care, and ten new injectable pharmaceuticals strengthen its presence in critical care, anti-infectives, pain management and oncology. These advancements align with Baxter’s strategic transformation, reinforcing its focus on high-value, patient-centric solutions.
Zacks Rank and Stocks to Consider
Currently, Baxter carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the industry have been discussed below.
AVAH delivered a trailing four-quarter average earnings surprise of 135.00%. The company is expected to release fourth-quarter results in March. Its shares have lost 4% in the past six months against the industry’s 2.1% growth.
Penumbra (PEN - Free Report) , carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 32.4% for 2025. Its earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%. The company is scheduled to release fourth-quarter results on Feb. 18.
PEN’s shares have gained 37.6% against the industry’s 0.1% decline in the past six months.
Masimo (MASI - Free Report) , carrying a Zacks Rank #2 at present, has an estimated growth rate of 9.5% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 47% against the industry’s 0.1% decline in the past six months. The company is scheduled to release fourth-quarter results on Feb. 25.
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BAX Stock Surges Following Q4 Earnings & Sales Beat, Margins Decline
Baxter International Inc. (BAX - Free Report) reported fourth-quarter 2024 adjusted earnings per share (EPS) of 58 cents, which beat the Zacks Consensus Estimate of 52 cents by 11.5%. The bottom line declined 10.8% from the year-ago quarter’s level due to a surge in costs and expenses.
On a GAAP basis, the company reported a loss per share of 95 cents against EPS of 43 cents in the prior-year quarter. The significant loss was due to special items, primarily related to the impact of a Front Line Care goodwill impairment charge, business optimization costs, Hurricane Helene costs and separation-related costs.
The company reported adjusted EPS from continuing operations, Medical Products & Therapies, Healthcare Systems & Technologies and Pharmaceuticals segments of 49 cents compared with 43 cents in the year-ago period.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Revenue Details
Revenues from continued operations totaled $2.75 billion, up 0.9% on a reported basis and 2% at constant currency (cc). The figure beat the Zacks Consensus Estimate by 3.4%.
Shares of BAX were up 8.4% in pre-market trading following better-than-expected quarterly results. The company’s shares have lost 14.8% in the past six months against the industry’s growth of 9.2%. The broader S&P 500 Index has moved up 10% in the same period.
Image Source: Zacks Investment Research
Segmental Details
Baxter completed its transformation plan, announced in February 2023, with the completion of the sale of its Kidney Care business last month. The company expects its streamlined businesses to offer new opportunities to redefine healthcare delivery and drive profitable growth.
As part of its transformation plan, Baxter established its new operating model, integrating its prior matrixed structure of nine businesses (operating across three geographic regions) into the aforementioned four verticalized global segments. The company started reporting under a new model since the third quarter of 2023.
Medical Products & Therapies
The segment includes Advanced Surgery and a new category, Infusion Therapies & Technologies. Total sales at this segment totaled $1.31 billion, nearly flat year over year reportedly but up 1% at cc. Growth from robust sales of the Novum IQ infusion pump, parenteral nutrition products and Advanced Surgery products was partially offset by reduced sales of IV solutions due to the impact of Hurricane Helene.
Infusion Therapies and Technologies’ sales totaled $1.02 billion, down 2% year over year reportedly and 1% at cc. Advanced Surgery category sales amounted to $292 million, up 5% year over year reportedly and 6% at cc.
Healthcare Systems and Technologies
The segment includes the Front Line Care category. It also includes the Patient Support Systems and Surgical Solutions categories, which are clubbed as Care & Connectivity Solutions. Total sales in this segment were $784 million, down 1% year over year reportedly as well as at cc. Sales were driven by new sales and upgrades for patient support systems, which were more than offset by certain supply constraints and exits from select markets or product categories.
Front Line Care category sales totaled $280 million, down 8% year over year reportedly as well as at cc. Care & Connectivity Solutions category sales amounted to $504 million, up 2% year over year reportedly and 3% at cc.
Pharmaceuticals
The segment presently includes two product categories — Injectables & Anesthesia and Drug Compounding. Total sales during the fourth quarter were $643 million, up 8% year over year reportedly as well as at cc. The growth was primarily driven by robust demand for Baxter's Drug Compounding services, along with strong growth in specialty injectables and additional sales from new launches.
Injectables and Anesthesia category sales totaled $383 million, up 7% year over year reportedly and 8% at cc. The Drug Compounding category sales amounted to $260 million, up 10% year over year reportedly and 9% at cc.
Other
Revenues in the segment amounted to $12 million, down 33% on a year-over-year basis as well as at cc.
Margin Analysis
Baxter reported an adjusted gross profit of $1.23 billion, up 0.7% year over year. As a percentage of revenues, the adjusted gross margin contracted 10 basis points (bps) to 44.5%.
Selling, general and administrative expenses amounted to $761 million, up 11.4% from the year-ago quarter’s figure. Research and development expenses totaled $211 million, up 66.1% on a year-over-year basis.
Adjusted operating income from continuing operations totaled $297 million, down 10% year over year. As a percentage of revenues, the adjusted operating margin declined 130 bps to 10.8%.
2025 Guidance
Baxter issued its guidance for first-quarter and full-year 2025.
For the first quarter, Baxter anticipates sales from continuing operations to grow 3-4% reportedly and 4% on an operational basis. The adjusted EPS for the period is expected to be in the range of 47-50 cents. The Zacks Consensus Estimate for sales and EPS is pegged at $2.62 billion and 52 cents, respectively.
For full-year 2025, continuing operational sales growth is expected to be 5-6% reportedly and 4-5% on an operational basis. The Zacks Consensus Estimate for the metric is pegged at $11.24 billion, implying a year-over-year improvement of 6.5% reportedly. Adjusted EPS is projected to be in the band of $2.45-$2.55. The Zacks Consensus Estimate is pegged at $2.47.
Baxter International Inc. Price, Consensus and EPS Surprise
Baxter International Inc. price-consensus-eps-surprise-chart | Baxter International Inc. Quote
Our Take
Baxter exited the fourth quarter on a strong note, with both earnings and sales beating estimates. Although declining margins remain a concern, the metric is expected to improve going forward following the transformational plan, which included the spin-off of Kidney Care and BioPharma Solutions businesses. The plan also included a simplified model with a faster and more effective response to macro and micro changes and an enhanced ability to advance innovation for its patients.
The $3.4 billion divestiture of its Kidney Care business, alongside the earlier sale of BioPharma Solutions and a shift to a vertical operating model, enhances operational efficiency and financial flexibility. BAX plans to use the proceeds from the sale to reduce debt. With a lower debt burden and improved cash flow, Baxter is poised to accelerate innovation and expand in core healthcare segments. Leadership transitions, including the appointment of a new CEO, should shape the next phase of strategic execution, driving sustainable growth and long-term value creation in the years ahead.
Baxter’s rapid recovery from Hurricane Helene ensures minimal disruption in 2025. With all manufacturing lines at North Cove restored to pre-hurricane levels, supply continuity is secured. Strong crisis management, infrastructure resilience and proactive coordination with stakeholders position Baxter for stable operations and uninterrupted growth in the coming year.
BAX’s recent product launches and FDA approvals position it for strong growth in 2025 and beyond. The Novum IQ infusion pumps enhance hospital efficiency, while Clinolipid’s expanded indication broadens Baxter’s impact on pediatric nutrition. The Vest APX airway clearance system improves respiratory care, and ten new injectable pharmaceuticals strengthen its presence in critical care, anti-infectives, pain management and oncology. These advancements align with Baxter’s strategic transformation, reinforcing its focus on high-value, patient-centric solutions.
Zacks Rank and Stocks to Consider
Currently, Baxter carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the industry have been discussed below.
Avenna Healthcare (AVAH - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated earnings growth rate of 666.7% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.
AVAH delivered a trailing four-quarter average earnings surprise of 135.00%. The company is expected to release fourth-quarter results in March. Its shares have lost 4% in the past six months against the industry’s 2.1% growth.
Penumbra (PEN - Free Report) , carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 32.4% for 2025. Its earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%. The company is scheduled to release fourth-quarter results on Feb. 18.
PEN’s shares have gained 37.6% against the industry’s 0.1% decline in the past six months.
Masimo (MASI - Free Report) , carrying a Zacks Rank #2 at present, has an estimated growth rate of 9.5% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 47% against the industry’s 0.1% decline in the past six months. The company is scheduled to release fourth-quarter results on Feb. 25.