Baxter (BAX) to Report Q1 Earnings: What's in the Offing?

Baxter International Inc. BAX is scheduled to release first-quarter 2020 results on Apr 30, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 10.2%. Further, it has a trailing four-quarter positive earnings surprise of 10.6%, on average.

Q1 Estimates

Currently, the Zacks Consensus Estimate for first-quarter revenues is pegged at $2.75 billion, suggesting growth of 4.5% from the year-ago reported figure. The consensus mark for earnings is pegged at 73 cents per share, indicating a decline of 3.9% from the prior-year quarter.

Factors at Play

New product launches, including PrisMax in the United States, and rising global demand for the company’s continuous renal replacement therapies is likely to have contributed to Baxter’s Acute Therapies business. This, in turn, is likely to have driven the segment’s first-quarter performance.

Moreover, the top line is anticipated to have benefited from Baxter’s strong product portfolio, and the planned launch of therapies and products. In fact, sales growth for first-quarter 2020 is projected in the range of 4-5% on a reported basis, and 5-6% on both cc and operational basis.

Baxter International Inc. Price and EPS Surprise

 

Baxter International Inc. Price and EPS Surprise

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

The company’s six global business units is likely to have contributed to the first-quarter sales.

Further, growing demand for Baxter’s Spectrum IQ and Evo IQ infusion pumps is likely to have positively impacted the fourth-quarter performance.

Rising demand of its hospital pharmacy compounding services, generic injectables and anesthesia products are likely to have driven the company’s international sales.

However, it is important to note that the high-degree of uncertainty surrounding the coronavirus outbreak (particularly since late February) might have impacted Baxter’s performance in the to-be-reported quarter.

Nonetheless, during fourth-quarter 2019, the company introduced the Sharesource 2.0 clinical portal that provides the healthcare providers better insights to patients’ home PD treatments while offering improved clinic workflow. Additionally, the company introduced Clinolipid (20% Lipid Injectable Emulsion), which is Baxter’s proprietary olive oil-based lipid emulsion, in the United States.

Additionally, the company expanded its injectable pharmaceuticals portfolio with the U.S. launch of Myxredlin (Insulin Human in 0.9% Sodium Chloride Injection), the first and only ready-to-use insulin for IV infusion in the hospital and other acute care settings. The company also introduced a ready-to-use eptifibatide, a first-of-its-kind premix presentation of a platelet aggregation inhibitor that prevents platelets from sticking together and clotting.

During fourth-quarter 2019, the company received FDA approval for faster preparation of FlosealHemostatic Matrix. This next generation of Floseal has 20% lesser components and steps to prepare, making it easier and faster for nurses in the operating room to provide surgeons with Floseal to help stop bleeding during procedures.

Moreover, the company achieved substantial milestones in its innovation pipeline, which includes U.S. and Canadian launches of PrisMax, U.S. launch of Myxredlin, European launch of Finomel and U.S. launch of Clinolipid.

These developments are likely to have positively impacted the company’s performance in the to-be-reported quarter.

However, intense competition in the renal care market might have weighed on Baxter’s margins.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here as you will see below.

Earnings ESP: Baxter has an Earnings ESP of -2.44%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Baxter carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Chemed Corporation CHE has an Earnings ESP of +0.42% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics Corporation HAE has an Earnings ESP of +2.76% and a Zacks Rank of 3.

DexCom, Inc. DXCM has an Earnings ESP of +139.12% and a Zacks Rank of 2.

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