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Baxter (BAX) Q1 Earnings and Revenues Surpass Estimates

Baxter International Inc. BAX reported first-quarter 2021 adjusted earnings per share (EPS) of 76 cents, which outpaced the Zacks Consensus Estimate of 64 cents by 18.8%. However, the bottom line declined 7.3% from the year-ago quarter.

Revenue Details

Revenues of $2.94 billion beat the Zacks Consensus Estimate of $2.89 billion by 1.7%. The top line also improved 5.1% year over year on a reported basis, and 1% on both constant currency (cc) and operational basis.

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 $1.56 billion, down 0.3% on a year-over-year basis and 1% at cc.

Baxter International Inc. Price, Consensus and EPS Surprise

Baxter International Inc. price-consensus-eps-surprise-chart | Baxter International Inc. Quote

In EMEA, revenues totaled $738 million, up 7.3% from the year-ago quarter and flat at cc.

In APAC, revenues of $648 million improved 18% from the prior-year quarter and 8% at cc.

Segmental Details

It is worth mentioning that starting from the first quarter of 2021, the company's segmental details of revenues separately show net sales from its BioPharma Solutions business that was previously included within Other.

Renal Care

This segment reported revenues of $922 million in the quarter under review, up 5.9% year over year. Revenues at the segment increased 2% at cc.

Medication Delivery

Revenues at the segment amounted to $652 million, down 3.8% from the year-ago quarter and 6% at cc.

Pharmaceuticals

Revenues at the segment totaled $552 million, up 6.9% from the year-ago quarter and 1% at cc.

Clinical Nutrition

Revenues at the segment were $234 million, up 7.8% from the year-ago quarter and 3% at cc.

Advanced Surgery

Revenues at the segment totaled $217 million, down 3.1% from the year-ago quarter and 6% at cc.

Acute Therapies

This segment reported revenues of $207 million, up 32.7% from the prior-year quarter and 28% at cc.

BioPharma Solutions

This segment reported revenues of $135 million, up 18.4% from the prior-year quarter and 11% at cc.

Other

Revenues in the segment were $27 million, flat on a year-over-year basis but down 4% at cc.

Margin Analysis

Baxter reported adjusted gross profit of $1.24 billion in the first quarter, down 0.2% year over year. As a percentage of revenues, gross margin contracted 230 basis points (bps) on a year-over-year basis at 42% in the first quarter.

Adjusted operating income fell 5.1% year over year to $501 million in the quarter under review. As a percentage of revenues, operating margin contracted 180 bps to 17% in the quarter under review.

2021 Guidance

For second-quarter 2021 the company anticipates sales to improve in the band of 14-15% on a reported basis, 8-9% at cc and 7-8% on an operational basis.

For the same period, adjusted EPS is estimated between 72 cents and 75 cents. The Zacks Consensus Estimate for the same is pegged at 78 cents.

For full-year 2021, Baxter anticipates sales growth in the range of 8-9% on a reported basis, 5-6% at cc and 4-5% on an operational basis.

Adjusted earnings per share is estimated in the range of $3.47 to $3.55. The Zacks Consensus Estimate for the same stands at $3.39.

Summing Up

Baxter ended first-quarter 2021 on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. The company witnessed strong performance across five of its business units. Growth in EMEA and APAC instills optimism.

Number of regulatory approvals, buyout, completion of agreements, and multiple collaborations to help in the manufacturing process of COVID-19 vaccines (on a contract basis) are primary highlights.

Meanwhile, weak performance across Medication Delivery and Advanced Surgery segments is a dampener. Also, contraction in both gross and operating margins remains a concern. Further, cut-throat competition in the MedTech markets is a woe.

Zacks Rank

Baxter currently carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks, which are expected to report earnings soon, are DENTSPLY SIRONA Inc. XRAY, The Cooper Companies, Inc. COO and Owens & Minor, Inc. OMI, each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

DENTSPLY SIRONA is set to release results on May 6. The Zacks Consensus Estimate for DENTSPLY SIRONA’s first-quarter 2021 adjusted EPS is pegged at 55 cents, suggesting growth of 27.9% from the year-ago quarter. The consensus mark for first-quarter revenues stands at $929.3 million, indicating year-over-year increase of 6.3%.

The Zacks Consensus Estimate for Cooper Companies’ fiscal second-quarter 2021 revenues is pegged at $685.2 million, suggesting year-over-year improvement of 30.5%. The same for EPS stands at $3.04, indicating growth of 101.3% from the year-ago reported figure.

The Zacks Consensus Estimate for Owens & Minor’s first-quarter 2021 EPS is currently pegged at 97 cents, indicating significant growth from the year-ago reported figure. The same for revenues stands at $2.29 billion, indicating an improvement of 7.9% from the year-ago reported figure.

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