Baxter Reports Quarterly Beat; Shares Down 2.7%

Baxter (NYSE: BAX) reported stronger-than-expected Q4 results, topping both earnings and revenue estimates driven by robust demand leading to strong performance across all regions.

However, despite the beat, shares of the American multinational health care company dropped 2.7% on February 17, after BAX issued FY2022 earnings per share (EPS) guidance below analysts’ expectations.

Q4 Numbers

Adjusted earnings of $1.04 per share grew 30% year-over-year and were a cent ahead of analysts’ expectations of $1.03 per share. The company reported earnings of $0.80 per share for the prior-year period.

Revenues jumped 10% year-over-year to $3.5 billion and exceeded consensus estimates of $3.35 billion. The increase in revenues reflected strong demand for certain Baxter products and therapies across all regions during the pandemic, which was partially offset by less surgical procedures due to the emergence of the Omicron variant.

FY2022 Outlook

Based on robust Q4 results, management provided the financial guidance for FY2022. The company forecasts adjusted earnings in the range of $4.25 to $4.35 per share, while the consensus estimate is pegged at $4.36 per share. Sales growth is forecast to be in the range of 24% to 25%.

For the first quarter, adjusted earnings are likely to range between $0.79 and $0.82 per share.

CEO Comments

BAX CEO, José (Joe) E. Almeida, commented, “Our December 2021 acquisition of Hillrom creates new potential for our team to advance connected care solutions, expand portfolio access and capture efficiencies to drive enhanced value for patients, clinicians, employees, investors and other stakeholders.”

Analysts Recommendation

Overall, the stock has a Strong Buy consensus rating based on 7 Buys and 1 Hold. The average Baxter International stock forecast of $99.63 implies 20.3% upside potential from current levels.

TipRanks’ Smart Score

BAX scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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