Baxter Beats on Earnings, Revenues - Analyst Blog

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Baxter International Inc. ( BAX ) revealed a marginal 1.1% fall in adjusted net earnings to $692 million in the fourth quarter of 2013 from $700 million in the year-ago quarter. However, on per share basis, adjusted net earnings were flat at $1.26 compared with the year ago level but beat the Zacks Consensus Estimate by a penny.

For full year 2013, net earnings inched up 2.0% to $2,567 million from $2,516 million a year ago. On per share basis, net earnings rose 3.1% to $4.67 from $4.53 in 2012 and were in line with the Zacks Consensus Estimate.

Revenues for the quarter went up 16.4% to $4,368 million globally and exceeded the Zacks Consensus Estimate of $4,249 million. Excluding the contribution from Gambro, revenues in the quarter grew 5% to $4.0 billion (or 6% excluding the impact of foreign currency).

Sales within the U.S. escalated 13% to $1,781 million while international sales rose 19% (20% excluding the impact of foreign currency) to $2,587 million in the quarter.

For full year 2013, Baxter's global sales rose 7.5% to $15,259 million, which is slightly higher than the Zacks Consensus Estimate of $15,135 million. Revenues associated with the Gambro acquisition were $513 million in the year.

Segment Results

Revenues from BioScience zoomed 5.3% (6% excluding the impact of foreign currency) to $1.776 million in the quarter. The increase was attributable to double-digit growth and strong demand for the Baxter's hemophilia therapies, including ADVATE (Antihemophilic Factor Recombinant, Plasma/Albumin-Free Method) and FEIBA (an inhibitor therapy) in the U.S. and Europe, as well as for biosurgery products.

Revenues from Medical Products surged 25.5% (or 27% excluding the impact of foreign currency) to $2,592 million. Revenues associated with the Gambro acquisition were $413 million in the fourth quarter. Excluding foreign currency and the contribution from the acquisition, revenues from the segment increased 7% due to solid growth across the entire business portfolio.

Financial Position

BAX had cash and cash equivalents of $2,733 million as of Dec 31, 2013, down from $3,270 million as of Dec 31, 2012. Total debt stood at $9,166 million as of Dec 31, 2013, up significantly by 54.6% from $5,930 million as of Dec 31, 2012.

In 2013, BAX generated cash flow from operations of $3,198 million, up nearly 3% from $3,106 million in 2012. Capital expenditures declined 31.4% to $1,525 million from $1,161 million in 2012.

Baxter returned an over $1.9 billion to shareholders through share repurchases of 13.0 million shares worth $913 million and dividends totaling $1.0 billion, reflecting about 27% increase in dividend payments from the prior-year period.

Guidance

For the first quarter of 2014, Baxter expects sales to grow between 13 and 14%, barring the impact of foreign currency. The company also expects adjusted earnings in the range of $1.06 to $1.09 per share in the quarter, which is lower than the current Zacks Consensus Estimate of $1.13.

For full year 2014, BAX anticipates sales growth in the range of 9 to 10%, excluding the impact of foreign exchange. The company also expects adjusted earnings between $5.05 and $5.25 per share and operating cash flow of $3.5 billion for the year. This compared with the Zacks Consensus Estimate for 2014 earnings of $5.02.

Our Take

Currently, Baxter has a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry include Cardiovascular Systems Inc. ( CSII ), NuVasive, Inc. ( NUVA ), and Covidien plc ( COV ). Both Cardiovascular Systems and NuVasive carry a Zacks Rank #1 (Strong Buy), while Covidien carries a Zacks Rank #2 (Buy).



BAXTER INTL (BAX): Free Stock Analysis Report

COVIDIEN PLC (COV): Free Stock Analysis Report

CARDIOVASCLR SY (CSII): Free Stock Analysis Report

NUVASIVE INC (NUVA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: BAX , COV , CSII , NUVA

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