Baxter raises profit forecast on demand for infusion pumps, dialysis products

Baxter International Inc. reported results for the first quarter of 2024.

“Baxter’s results in the first quarter reflect the company’s solid operational performance, fueled by the benefits being realized from our ongoing strategic transformation initiatives, including our new operating model structure, and continued strong execution across our integrated supply chain network,” said José (Joe) E. Almeida, chair, president and chief executive officer. “We are squarely focused on improving our operational execution and excited by the opportunities we are creating through recent innovation milestones. Our objective remains to accelerate performance and drive increased value for patients, healthcare providers and shareholders.”

First-quarter financial results
Worldwide sales from continuing operations in the first quarter totaled $3.59 billion, an increase of 2% on a reported basis and 3% on a constant currency basis, exceeding the company’s previously issued guidance of approximately 1% on a reported basis and 1% to 2% on a constant currency basis. Continuing operations exclude Baxter’s BioPharma Solutions (BPS) business, which was divested at the end of the third quarter of 2023.

U.S. sales from continuing operations in the first quarter totaled $1.66 billion, flat year-over-year on a reported basis. International sales from continuing operations totaled $1.93 billion, an increase of 5% on both a reported basis and at constant currency rates.

First-quarter sales performance was driven by better-than-expected results across the majority of Baxter’s business segments. Sales performance by segment was led by double-digit growth in Pharmaceuticals, reflecting the impact of new product launches and increased demand for Baxter’s Drug Compounding services. Baxter’s Medical Products & Therapies and Kidney Care segments both delivered mid-single-digit growth at constant currency rates, reflecting the benefit of positive demand and pricing across these two segments. This strong growth helped offset a high single-digit decline in Baxter’s Healthcare Systems & Technologies segment, reflecting the phasing of certain orders to later in the year, timing of backlog reduction efforts in the prior year period and softness in the U.S. primary care market, as well as some operational challenges that are being addressed to enhance the future performance of this segment. Growth for the Healthcare Systems & Technologies segment is expected to meaningfully improve in the second half of the year.

For the first quarter, total net income attributable to Baxter on a U.S. GAAP basis was $37 million, or $0.07 per diluted share. Total U.S. GAAP diluted EPS includes $0.07 from continuing operations. These results include special items totaling $294 million, primarily related to the impact of intangible amortization, separation-related costs and business optimization costs, among other factors. On an adjusted basis, excluding the impact of special items, income from continuing operations was $0.65 per diluted share, which exceeded the company’s previously issued guidance of $0.59 to $0.62 per diluted share, driven by top-line performance and operational execution across Integrated Supply Chain.

Kidney Care separation update
Baxter’s preparations continue for the proposed separation of its Kidney Care segment. As announced on March 4, 2024, the company is exploring a potential sale of the Kidney Care business in lieu of a proposed spinoff of that business. No final decision on the separation structure has been made. Regardless of the selected path, Baxter currently expects the separation of its Kidney Care business to take place in the second half of 2024.

2024 financial outlook
For full-year 2024: Baxter now expects sales growth of approximately 2% on a reported basis and 2% to 3% on a constant currency basis. The company expects adjusted earnings, before special items, of $2.88 to $2.98 per diluted share.

For second-quarter 2024: The company expects sales growth of approximately 1% on a reported basis and 2% to 3% on a constant currency basis. The company expects adjusted earnings, before special items, of $0.65 to $0.67 per diluted share.
MB Bureau