Baxter Clocks Better-Than-Expected Q4 Earnings, But FY22 Guidance Trail Street View

Baxter International Inc BAX has posted Q4 revenue of $3.5 billion, beating the consensus of $3.35 billion, up 10% on a reported basis, 12% on a constant currency basis, and 4% on an operational basis.

• Adjusted EPS of $1.04 increased 30%, marginally ahead of the consensus of $1.03.
• Following Baxter's acquisition of Hillrom, Baxter's Q4 and FY21 results include Hillrom's financial results for the last 19 days of the quarter. Hillrom added $212 million to Q4 sales.
• Baxter's three geographic segments – Americas, EMEA, and APAC – all positively contributed to sales growth, reflecting ongoing demand for select Baxter products amid the pandemic, partially offset lower surgical procedures resulting from the emergence of omicron variant.
• The gross margin improved from 37.4% to 40%, and the operating margin declined from 12.8% to 10.9%.
• Outlook: Baxter expects FY22 sales growth of approximately 24% - 25% on a reported basis and around 4% on an operational basis. 
• It expects an adjusted EPS of $4.25 - $4.35, versus the consensus of $4.36.
• For Q1 FY22, Baxter expects an adjusted EPS of $0.79 - $0.82 compared to the Wall Street estimate of $0.97.
• The Company forecasts sales growth of 1% - 3% on an operational basis.
• Price Action: BAX shares are trading 2.30% lower at $83.17 on the last check Thursday.