Baxter Expects Hurricane Helene Aftermath To Impact Near-Term Financial Outlook

Baxter International Inc. BAX reported a third-quarter 2024 adjusted EPS of 80 cents, beating the management guidance of 77 cents to 79 cents and the Wall Street estimate of 78 cents.

This was driven by top-line strength in Medical Products & Therapies and Kidney Care, continued improvements in the integrated supply chain, and disciplined operating expense management.

Also Read: US Hospitals Face Critical IV Fluid Shortage After Baxter Facility Shuts Down Due To Hurricane Helene

The Deerfield, Illinois-based company reported sales of $3.85 billion, in line with consensus.

Baxter’s worldwide sales include continuing sales of $2.69 billion and discontinued operations (kidney care) sales of $1.15 billion.

Excluding Q3 2023 BioPharma Solutions (BPS) sales and including sales of Kidney Care in both periods, worldwide Baxter sales grew 4% on both a reported and constant currency basis, in line with the company’s prior guidance.

Adjusted EPS from continuing operations was 49 cents, up 14% year-over-year.

Revenue from Medical Products & Therapies increased 7% to $1.34 billion, Healthcare Systems & Technologies sales increased 1% to $752 million, and Pharmaceuticals sales were up 1% to $588 million.

Last week, Baxter said it has restarted North Cove’s highest-throughput IV solutions manufacturing line.

At its peak operation (before Hurricane Helene), this line represented approximately 25% of the site’s total production and approximately 50% of the site’s production of one-liter IV solutions, the most commonly used size by hospitals and clinics.

Baxter’s current expectation is that new product from North Cove could begin shipping to distributors and customers by the end of November, ahead of its original expectations.

Guidance: “While the hurricane’s aftermath is expected to have an impact on our near-term financial outlook, we remain confident in Baxter’s outlook and growth trajectory following completion of the pending Kidney Care sale,” said José (Joe) Almeida, chair, president & CEO.

Baxter expects fourth-quarter adjusted EPS of 77 cents to 81 cents, with 50 cents to 53 cents expected from continuing operations.

For the fourth quarter, the company forecasts sales from continuing operations to decline in low-single digits on a reported and constant currency basis.

For fiscal year 2024, Baxter sees adjusted EPS of $2.90-$2.94 compared to a consensus of $2.95 and prior guidance of $2.93-$3.01, including $1.81-$1.84 from continuing operations.

The company expects sales (from continuing operations) growth of around 2%.

Baxter anticipates a full-year 2025 adjusted operating margin of approximately 16.5% on a continuing operations basis, which reflects an anticipated 100 basis point negative impact due to stranded costs. The company expects to offset these stranded costs in 2027.

Price Action: BAX stock is down 1.22% at $35.60 during the premarket session at last check Friday.

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