Back to top

Image: Bigstock

Why Is Baxter International (BAX) Up 5.5% Since the Last Earnings Report?

Read MoreHide Full Article

A month has gone by since the last earnings report for Baxter International Inc. (BAX - Free Report) . Shares have added about 5.5% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Baxter International (BAX - Free Report) Q4 Earnings Beat, Revenues Lag

Baxter International Inc. (BAX - Free Report) reported fourth-quarter 2016 adjusted earnings of $0.57 per share, which surpassed the Zacks Consensus Estimate by $0.05 and were well above the year-ago figure of $0.43.

Over the last four trailing quarters, the company posted positive earnings surprises, the average being 27.02%.

The company posted sales of $2.64 billion, marginally missing the Zacks Consensus Estimate of $2.65 billion. At constant currency (cc), revenues increased 2% on a year-over-year basis.

For the full year, Baxter reported adjusted earnings of $1.96 per share, an increase of 42% on a year-over-year basis. The company posted full-year revenues of $10.2 billion, up 4% on year-over-year basis at cc.

Segment Details

U.S.sales were up 5% on a year-over-year basis to $1.1 billion. International sales increased 1% at cc to $1.5 billion.

Adjusting for the impact of foreign exchange and increased competition for the company’s cyclophosphamide, Baxter’s sales were up 7% in the domestic market. Internationally, sales increased 3% in the reported quarter.

Hospital products sales inched up 1% at cc on a year-over-year basis to $1.6 billion. Sales in this segment were driven by solid demand for IV solutions, nutritional therapies and IV access administration sets.

Renal products sales increased 5% to $1 billion. Renal products sales were driven by peritoneal dialysis products as well as increased global demand for continuous renal replacement therapies.

Guidance

For full-year 2017, the company projects earnings from continuing operations, before special items, in the band of $2.10 to $2.18 per share.

For the first quarter of 2017, Baxter expects sales growth in the range of 3% to 4% at cc. Adjusted earnings are forecast in the range of $0.50 to $0.52 per share.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Baxter International's stock has an average Growth Score of 'C', however its momentum is doing a lot better with an 'A'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is primarily suitable for momentum investors while also being suitable for those looking for value and to a lesser degree growth.

Outlook

The stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Baxter International Inc. (BAX) - free report >>

Published in