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Baxter International (BAX) Q3 Earnings, Sales Top; View Up

Zacks Equity Research

Baxter International Inc. BAX reported third-quarter 2016 adjusted earnings of 56 cents per share, which surpassed the Zacks Consensus Estimate by 12 cents and were well above the year-ago figure of 41 cents.

The company posted sales of $2,558 million, beating the Zacks Consensus Estimate for revenues of $2,545 million. At constant currency (cc), revenues increased 4% on a year-over-year basis.

U.S. sales were up 6% on a year-over-year basis to $1.1 billion. International sales increased 3% at cc to $1.5 billion. Adjusting for the impact of foreign exchange and increased competition for the company’s cyclophosphamide , and 2015 PROTOPAM orders, Baxter’s sales were up 12% in the domestic market. Internationally, sales increased 6% in the reported quarter.

Hospital products sales improved 3% at cc on a year-over-year basis to $1.6 billion, while Renal products sales increased 6% to $977 million.
Hospital Products sales were driven by solid demand for IV solutions, nutritional therapies, pharmacy injectables and IV access administration sets. Renal products sales were driven by peritoneal dialysis products as well as increased demand globally for continuous renal replacement therapies.

Guidance Raised

Based on the company’s strong performance in the first three quarters of the year, Baxter raised its outlook for the full year. Baxter now expects sales to increase approximately 2% on a reported basis and 4% at cc. Previous sales guidance for reported basis was in the range of 1% to 2% and at cc in the range of 3% to 4%.

Adjusted earnings per share are now anticipated in the range of $1.88 to $1.91, up from the earlier guidance of $1.69 to $1.74.

For the fourth quarter of 2016, Baxter expects sales growth at both reported and cc of approximately 2%. Adjusted earnings are forecast in the range of 49 cents to 52 cents per share.

BAXTER INTL Price, Consensus and EPS Surprise

BAXTER INTL Price, Consensus and EPS Surprise | BAXTER INTL Quote

Zacks Rank & Stocks to Consider

Currently, Baxter has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical sector are ABIOMED Inc. ABMD, AngioDynamics Inc. ANGO and Glaukos Corporation GKOS. Notably all the companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ABIOMED has a long-term expected earnings growth rate of approximately 26.7%. Notably, the stock represents an impressive one-year return of 35.4%.

AngioDynamics has a long-term expected earnings growth rate of 15.00%. The company posted a solid one-year return of 43.0%.

Glaukos Corporation recorded a stellar one-year return of almost 64.3%. Notably, the company posted a positive surprise in the past four quarters, the average being 110.9%.

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