Baxter Q2 Earnings Marginally Beat Estimates; Revises Upper End Of 2021 EPS Outlook

Baxter International Inc BAX Q2 revenue of $3.1 billion, in line with the consensus, increased 14% on a reported basis, 9% on a constant currency basis, and 8% on an operational basis.
Adjusted EPS of $0.80 increased 25% and surpassed the estimate of $0.75.
Among Baxter's product categories, growth was led by BioPharma Solutions, Advanced Surgery, and Medication Delivery, which each delivered double-digit growth.
Acute Therapies grew at low single digits on a reported basis and declined mid-single digits at constant currency rates, reflecting a challenging comparison due to surging product demand this time last year related to the COVID-19 pandemic.
The gross margin expanded from 38.2% to 39.8%, and the operating margin improved from 12.2% to 13.7%.
Outlook: Baxter expects full-year 2021 sales growth of approximately 8% on a reported basis, 5% to 6% on a constant currency basis, and 4% to 5% on an operational basis. It expects an adjusted EPS of $3.49 - $3.55, versus the $3.40 consensus.
For Q3, the Company sees sales growth of approximately 7% on a constant currency basis, 6% on an operational basis. It expects an adjusted EPS of $0.93 to $0.95.
The Company is reportedly in talks to acquire Hill Rom.
Price Action: BAX shares closed at $81.91 on Wednesday.

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