Baxter's 2014-first quarter adjusted earnings per share of $1.19
rose 9.2% y-o-y and beat the Zacks Consensus Estimate by $0.09.
Revenues of $3,951 million were up 14.6% and topped the mark as
well. We are impressed by optimistic financial guidance rendered by
the company, indicating earnings and revenue growth. Although
expensive, the Gambro acquisition has long term prospects for
Baxter. Further, a solid product pipeline and strategic
collaborations, represents key value drivers for the company.
However, we are concerned about integration-related risks along
with a somber outlook for hospital. As a result, we reiterate our
Neutral recommendation on Baxter with a target of $79.00.
Founded in 1931, Baxter International, Inc. (BAX) is a global
medical products and services company with expertise in medical
devices, pharmaceuticals, and biotechnology. The company is
headquartered in Deerfield, Illinois. Baxter manufactures its
products in 27 countries and markets them in more than 100
countries. Majority of its products are sold outside the U.S.
(58.0% in the first quarter of 2014). The company operates through
two business segments: BioScience and Medical Products.
BioScience segment (40.7% of total revenue in the first quarter
of 2014) processes recombinant and plasma-based proteins to treat
hemophilia and other bleeding disorders plasma-based therapies to
treat immune deficiencies, alpha-1 antitrypsin deficiency, burns
and shock, and other chronic and acute blood-related conditions. It
also sells biosurgery products and vaccines. Currently, the segment
includes four commercial franchises:
Hemophilia This includes sales of recombinant factor VIII
products and plasma-derived hemophilia products (primarily
plasma-derived factor IX, factor VIII and inhibitor therapies).
BioTherapeutics This includes sales of antibody-replacement
immunoglobulin therapies and other plasma-based therapies, such as
albumin and alpha-1 antitrypsin products.
BioSurgery This consists of biological products and medical
devices used in surgical procedures for hemostasis, tissue sealing,
adhesion prevention and hard tissue repair, as well as soft tissue
repair and microsurgery products.
Vaccines This consists of vaccines for meningitis C and
tick-borne encephalitis, and includes ongoing collaborations for
the development of seasonal and pandemic influenza vaccines.
Medical Products segment (59.3% of total revenue in the first
quarter of 2014) manufactures intravenous (IV) solutions and
administration sets, premixed drugs and drug-reconstitution
systems, pre-filled vials and syringes for injectable drugs, IV
nutrition products, infusion pumps, and inhalation anesthetics. It
also manufactures products and provides services related to
pharmacy compounding, drug formulation and packaging technologies
as well as to treat end-stage renal disease, or irreversible kidney
failure. These apart, the segment provides products and solutions
for home-based peritoneal dialysis (PD) therapy and hospital or
clinic-based hemodialysis (HD) therapy. Currently, the segment
includes four commercial franchises:
Fluid Systems This consists of IV therapies, infusion pumps,
administration sets and premixed and oncology drugs platforms.
Renal This includes peritoneal dialysis (PD) and hemodialysis
Specialty Pharmaceuticals This includes nutrition and anesthesia
BioPharma Solutions This comprised sales from the pharmaceutical
partnering business and pharmacy compounding services.
Baxter International Inc. (BAX): Read the Full
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