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Baxter (BAX) Q4 Earnings and Revenues Surpass Estimates

·6 min read

Baxter International Inc. BAX reported fourth-quarter 2021 adjusted earnings per share (EPS) of $1.04, which outpaced the Zacks Consensus Estimate of $1.03 by 0.9%. The bottom line improved 30% from the year-ago quarter.

For full-year 2021, the company reported an adjusted EPS of $3.61, up 17% from the previous year. The figure matched the consensus mark.

GAAP EPS in the quarter was 47 cents, up 42% from the prior-year quarter.

Revenue Details

Revenues of $3.51 billion surpassed the Zacks Consensus Estimate by 4.6%. The top line improved 10% year over year on a reported basis, 12% on a constant currency (cc) basis and 4% on an operational basis.

For full-year 2021, the company reported revenues of $12.78 billion, up 10% from the previous year. The figure outpaced the consensus mark by 1.2%.

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 $1.76 billion, up 4% on a year-over-year basis and 5% at cc.

In EMEA, revenues totaled $815 million, up 2% from the year-ago quarter and 5% at cc.

In APAC, revenues of $732 million improved 5% from the prior-year quarter and 6% at cc.

Segmental Details

It is worth mentioning that in relation to the Hillrom buyout (December 2021), Baxter has added three new product categories — Patient Support Systems, Front Line Care and Surgical Solutions. During the quarter under review, Patient Support Systems reported revenues of $115 million, while Front Line Care and Surgical Solutions reported revenues of $70 million and $27 million, respectively.

Renal Care

This segment reported revenues of $1.03 billion in the quarter under review, up 2% from the prior-year quarter and 4% at cc.

Medication Delivery

Revenues at the segment amounted to $784 million, up 6% from the year-ago quarter and 6% at cc.

Baxter International Inc. Price, Consensus and EPS Surprise

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

Pharmaceuticals

Revenues at the segment totaled $604 million, up 7% from the year-ago quarter and 8% at cc.

Clinical Nutrition

Revenues at the segment were $249 million, up 2% from the year-ago quarter and 4% at cc.

Advanced Surgery

Revenues at the segment amounted to $255 million, down 2% from the year-ago quarter and flat at cc.

Acute Therapies

This segment reported revenues of $202 million, down 9% from the prior-year quarter and 7% at cc.

BioPharma Solutions

This segment reported revenues of $145 million, up 26% from the prior-year quarter and 31% at cc.

Other

Revenues in the segment were $30 million, up 20% on a year-over-year basis and 20% at cc.

Margin Analysis

Baxter reported an adjusted gross profit of $1.58 billion in the fourth quarter, up 18.2% year over year. As a percentage of revenues, gross margin expanded 290 basis points (bps) to 44.3% in the fourth quarter.

Selling, general and administrative expenses amounted to $885 million, up 36% from the year-ago quarter. Meanwhile, research and development expenses were $138 million, up 2% on a year-over-year basis.

Adjusted operating income rose 26.8% year over year to $714 million in the quarter under review. As a percentage of revenues, operating margin expanded 260 bps to 20.3% in the quarter under review.

2022 Guidance

For first-quarter 2022, the company anticipates sales to improve in the range of 24% to 25% on a reported basis and 27% to 28%% at cc. On an operational basis, the company expects low single-digit revenue growth.

For the same period, adjusted EPS is expected between 79 cents and 82 cents. The Zacks Consensus Estimate for the same is pegged at 90 cents per share.

For full-year 2021, Baxter anticipates sales growth to improve in the band of 24-25% on a reported basis, 26-27% at cc and around 4% on an operational basis.

Adjusted earnings per share is estimated in the range of $4.25 to $4.35. The Zacks Consensus Estimate for the same stands at $4.23.

Summing Up

Baxter ended fourth-quarter 2021 on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. The company witnessed strong performance across six of its business units. Growth in Americas, EMEA and APAC is encouraging. Expansion in both gross and operating margins fuels further optimism.

With respect to business highlights during the quarter under review, regulatory approvals, acquisitions, the beginning of the production of multiple COVID-19 vaccines (on a contract basis), and various launches deserve mention.

Apart from this, Baxter’s Hillrom buyout positions it well to accelerate both top and bottom-line performance and drive innovation associated with connected care solutions focused on boosting clinical outcomes for patients and enhancing workflow efficiency for customers.

Meanwhile, cut-throat competition in the MedTech markets remains a woe. An increase in selling, general and administrative expenses is concerning.

Zacks Rank

Baxter currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Some other top-ranked stocks in the broader medical space that have announced quarterly results are GlaxoSmithKline plc GSK, Molina Healthcare, Inc. MOH and Bio-Rad Laboratories, Inc. BIO.

GlaxoSmithKline, carrying a Zacks Rank #2, reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share (“ADS”), which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GlaxoSmithKline has an estimated long-term growth rate of 5.6%. GSK surpassed earnings estimates in three of the trailing four quarters and matched once, the average surprise being 20.5%.

Molina Healthcare reported fourth-quarter 2021 adjusted EPS of $2.88, which surpassed the Zacks Consensus Estimate by 2.1%. Fourth-quarter revenues of $7.41 billion outpaced the Zacks Consensus Estimate by 3.9%. It currently carries a Zacks Rank #2.

Molina Healthcare has an estimated long-term growth rate of 18.8%. MOH surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 5%.

Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. Fourth-quarter revenues of $732.8 million outpaced the Zacks Consensus Estimate by 0.5%. It currently has a Zacks Rank #2.

Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in each of the trailing four quarters, the average surprise being 66.9%.


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