Baxter International (NYSE: BAX) reported an improving financial performance when it announced its fourth-quarter results at the end of January. Revenue increased by 2% on a reported basis year over year, while earnings were up by 22%.
The company announced its first-quarter results before the market opened on Thursday, and there was both good news and bad news for investors. Here are the highlights of Baxter's Q1 update.
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By the numbers
Baxter reported revenue in the first quarter of $2.63 billion. This reflected a 2% decrease from the prior-year-period revenue total of $2.67 billion. The consensus among Wall Street analysts projected Q1 revenue of $2.61 billion.
On a GAAP basis, Baxter's net income in the first quarter was $347 million, or $0.66 per share. The company's bottom line reflected an 11% decrease from the prior-year-period GAAP net income of $389 million, or $0.71 per share.
The company's adjusted net income in the first quarter was $399 million, or $0.76 per share. This was an improvement of Baxter's result in the prior-year period, when the company announced adjusted net income of $388 million, or $0.70 per share. Baxter beat its own expectations of $0.66 to $0.68 per diluted share. It was also better than the consensus analysts' adjusted earnings estimate of $0.68 per share.
Behind the numbers
Baxter's Q1 performance in revenue was mainly driven by the growth in peritoneal dialysis and continuous renal replacement therapies, certain generic injectable pharmaceuticals, and hemostats and sealants. There was also an increase in demand for the company's hospital pharmacy compounding and Cytotec contract manufacturing services.
The company experienced its highest growth in the Asia Pacific (APAC) region, with sales increasing 2% as reported and 7% on a constant-currency basis. Baxter's Europe, Middle East, and Africa (EMEA) sales increased by 4% year over year on a constant-currency basis as well, although the region's sales fell by 3% without adjusting for foreign exchange fluctuations.
Baxter's key highlights from Q1 included:
- Launched platelet aggregation inhibitor eptifibatide
- Announced Floseal Hemostatic Matrix approval from the U.S. Food and Drug Administration (FDA)
- Initiated the company's collaboration with bioMérieux, the world leader in in vitro diagnostics
- Received recognition from Forbes magazine, the National Association for Female Executives (NAFE), and the Human Rights Campaign Foundation (HRC)
Baxter expects that adjusted earnings from continuing operations for full-year 2019, before special items, will be between $3.27 and $3.35 per diluted share. The company also anticipates second-quarter adjusted earnings from continuing operations, before special items, to be between $0.80 and $0.82 per diluted share.
Joe Almeida, CEO and chairman of Baxter International, was pleased with his company's Q1 performance. But he's also looking ahead, stating that Baxter remains "committed to executing on our strategy to deliver enhanced performance in 2019 and beyond."
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