Baxter International Earnings Rise, Meet Estimates
Baxter International Inc. (BAX) posted nearly 6.0% rise in adjusted net earnings to $720 million or $1.31 per share for the third quarter of 2014 from $681 million or $1.24 per share in the same quarter a year back. With this, earnings per share fell within the company’s previously issued guidance of $1.28 to $1.32 and met the Zacks Consensus Estimate.
Reported net earnings were $468 million or 86 cents in the 2014-third quarter, compared with $544 million or 99 cents in the same quarter of 2013.
Baxter International Inc - Earnings Surprise | FindTheBest
Revenues and Margins
Revenues for the quarter went up 13.1% to $4,197 million globally. Excluding the $408 million contribution from Gambro, revenues in the quarter grew 5%.
Revenues within the U.S. escalated 7.3% to $1,755 million while international revenues rose 17.7% (both in reported and constant currency) to $2,442 million in the quarter.
Adjusted gross profit rose 8.4% to $2,119 million but adjusted gross margin fell 20 basis points (bps) to 50.5% in the quarter. Adjusted pre-tax earnings rose 7.7% to $914 million in the quarter.
Segment Results
Revenues from BioScience zoomed 7.5% (both in reported and constant currency) to $1,673 million in the quarter. The increase was attributable to double-digit growth and continued strong demand for the company’s hemophilia therapies, including ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] and FEIBA (an inhibitor therapy), as well as the benefit from government collaborations and the timing of international tenders.
Revenues from Medical Products spiked 17.2% to $2,524 million. The increase was driven by solid sales in the U.S. due to double-digit gains in peritoneal dialysis patients, as well as strong sales of intravenous and nutritional therapies.
Financial Position
Baxter had cash and cash equivalents of $2,078 million as of Sep 30, 2014, down 12.5% from $2,376 million as of Sep 30, 2013. Total debt stood at $9.268 million as of Sep 30, 2014, up 2.2% from $9,066 million as of Sep 30, 2013.
In the first nine months of 2014, Baxter generated cash flow from operations of $6,433 million. which was more than double from $2,660 million in the same period of 2013. Capital expenditures escalated 27.8% to $1,325 million from $1,037 million in the first nine months of 2013.
Outlook
For the fourth quarter of 2014, Baxter expects revenues to grow by 3%, barring the impact of foreign currency. The company also expects adjusted earnings in the range of $1.30 to $1.33 per share for the quarter. The current Zacks Consensus Estimate of $1.33 coincides with the upper-end of the guided range.
For full year 2014, Baxter now expects higher revenue growth of 11 to 12%, up from the prior range of 10 to 11%, excluding the impact of foreign exchange.
However, Baxter lowered its adjusted earnings per share guidance to $4.86 to $4.89 from $5.10 to $5.20. It has kept its operating cash flow guidance intact at $3.5 billion for the year, excluding cash costs related to the spin-off of the biopharmaceutical business. The Zacks Consensus Estimate of $4.88 lies within the guided range.
Zacks Rank
Currently, Baxter retain a Zacks Rank #4 (Sell). Some better-ranked stocks in the medical products industry include GW Pharmaceuticals plc (GWPH), ZELTIQ Aesthetics, Inc. (ZLTQ), and Alere Inc. (ALR). GW Pharmaceuticals and ZELTIQ Aesthetics sport a Zacks Rank #1 (Strong Buy), while Alere carry a Zacks Rank #2 (Buy) at present.
Read the Full Research Report on BAX
Read the Full Research Report on ALR
Read the Full Research Report on GWPH
Read the Full Research Report on ZLTQ
Zacks Investment Research
