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Baxter (BAX) Q1 Earnings and Revenues Surpass Estimates

Baxter International Inc. BAX reported first-quarter 2020 adjusted earnings of 82 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents by 12.3%. The bottom line also improved 9.3% from the year-ago quarter.

Revenues of $2.80 billion beat the Zacks Consensus Estimate of $2.75 billion by 1.8%. The top line improved 6.2% year over year on a reported basis and 8% on both constant currency (cc) and operational basis.

Geographical Details

Baxter reports operating results through three geographic segments — Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific).

In Americas, Baxter reported revenues of $1.49 billion, up 6.4% on a year-over-year basis and 8% at cc.

In EMEA, revenues totaled $754 million, up 6.6% from the year-ago quarter and 10% at cc.

In APAC, revenues of $549 million improved 5.2% from the prior-year quarter and 9% at cc.

Baxter International Inc. Price, Consensus and EPS Surprise

 

Baxter International Inc. Price, Consensus and EPS Surprise

Baxter International Inc. price-consensus-eps-surprise-chart | Baxter International Inc. Quote

Segmental Details

Renal Care

This segment reported revenues of $870 million in the quarter under review, up 1.9% year over year. Revenues at the segment increased 4% at cc.

Medication Delivery

Revenues at the segment grossed $690 million, up 8.8% from the year-ago quarter and 10% at cc.

Pharmaceuticals

Revenues at the segment amounted to $527 million, up 3.3% from the year-ago quarter and 6% at cc.

Clinical Nutrition

Revenues at the segment were $220 million, up 7.3% from the year-ago quarter and 10% at cc.

Advanced Surgery

Revenues at the segment totaled $224 million, up 12.6% from the year-ago quarter and 14% at cc.

Acute Therapies

This segment reported revenues of $156 million, up 20.9% from the prior-year quarter and 23% at cc.

Other

Revenues in the segment grossed $115 million, up 7.5% on a year-over-year basis and 9% at cc.

Margin Analysis

Baxter registered gross profit of $1.16 billion in the first quarter, up 7.7% year over year. As a percentage of revenues, gross margin expanded 60 bps on a year-over-year basis at 41.5% in the first quarter.

Operating income rose 6.7% year over year to $409 million in the quarter under review. As a percentage of revenues, operating margin expanded 10 bps to 14.6% in the quarter under review.

Guidance

Due to the high-degree of uncertainty surrounding COVID-19 and the potential financial impact from the same, Baxter has refrained from issuing any guidance for the second quarter or full-year 2020.

Summing Up

Baxter ended first-quarter 2020 on a strong note, with both earnings and revenues beating the Zacks Consensus Estimate. The company witnessed strong performance across all its segments.

Growth in APAC instills optimism. The company received the Emergency Use Authorization (EUA) from the FDA for the Oxiris filter set, which is the only filter set available in the United States to lower pro-inflammatory cytokine levels in the blood for confirmed COVID-19 cases with confirmed or imminent respiratory failure that require blood purification.

Moreover, Baxter entered a partnership with MedAware — a specialist in clinical big-data analytics and machine learning algorithms that provides artificial intelligence (AI)-based safety software for identifying medication-related errors. Also, the company acquired toSense, a California-based technology company, which is likely to be crucial to Baxter’s development and launch of leading-edge monitoring innovations.

The company also introduced a new generation of Peri-Strips Dry with Veritas Collagen Matrix (PSDV) surgical product, known as PSDV with Secure Grip. The company issued $1.25 billion of long-term debt to further strengthen its balance sheet and offer additional liquidity with respect to the COVID???19 pandemic.

Meanwhile, cut-throat competition in the MedTech markets remains a concern.

Zacks Rank

Baxter currently carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks in the broader medical space are Exact Sciences Corporation EXAS, Aphria Inc. APHA and Pacific Biosciences of California, Inc. PACB, each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Exact Sciences’s first-quarter 2020 revenues is pegged at $350.2 million, suggesting a whopping year-over-year improvement of 116.1%. The same for EPS stands at a loss of 60 cents, indicating an improvement of9.1% from the prior-year quarter.

The Zacks Consensus Estimate for Aphria’s fourth-quarter fiscal 2020 revenues is $100.3 million, suggesting growth of 4.4% from the year-earlier reported figure.

The Zacks Consensus Estimate for Pacific Biosciences’ first-quarter 2020 revenues is pegged at $20.1 million, suggesting year-over-year improvement of 22.3%. The same for loss stands at 15 cents, indicating year-over-year improvement of 25%.

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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 Nasdaq, Inc.

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