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Jun 30, 2023
Baxter Q2 2023 Earnings Report
Baxter's Q2 2023 performance reflected solid demand for its medical products and progress in transformational actions.
Key Takeaways
Baxter reported a 3% increase in second-quarter revenues on a reported basis and a 4% increase on a constant currency basis, exceeding previously issued guidance. U.S. GAAP EPS was ($0.28), while adjusted EPS was $0.66. The company is progressing with its transformational actions, including the planned spinoff of its Renal Care and Acute Therapies businesses and the divestiture of its BioPharma Solutions business.
Second-quarter revenues increased 3% on a reported basis and 4% on a constant currency basis, ahead of the company’s previously issued guidance.
Second-quarter U.S. GAAP earnings (loss) per share (EPS) (including discontinued operations) of ($0.28); adjusted EPS (including discontinued operations) of $0.66.
Second-quarter U.S. GAAP EPS from continuing operations of ($0.39); adjusted EPS from continuing operations of $0.55.
Baxter signed a definitive agreement to divest its BioPharma Solutions (BPS) business to Advent International and Warburg Pincus.
Baxter
Baxter
Baxter Revenue by Geographic Location
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United States Revenue
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CapyFin.com Forward Guidance
Baxter provided sales growth and adjusted earnings per share guidance for the third quarter and full year 2023. The guidance considers two scenarios: one where BPS remains part of Baxter through the full year and another where the BPS sale is completed on September 30, 2023.
Positive Outlook
- Third-quarter sales growth from continuing operations is expected to be approximately 2% on a reported basis and 1% on a constant currency basis.
- Third-quarter adjusted earnings in aggregate (including discontinued operations) are expected to be $0.78 to $0.80 per diluted share.
- Third-quarter adjusted earnings from continuing operations are expected to be $0.65 to $0.67 per diluted share.
- Full-year 2023 sales growth from continuing operations is expected to be 1% to 2% on a reported basis and approximately 2% on a constant currency basis (assuming BPS remains part of Baxter).
- Full-year 2023 adjusted earnings are expected to increase due to reduced interest expense after debt repayment.
Challenges Ahead
- The ultimate timing of the BPS sale is uncertain.
- If the BPS sale is completed on September 30, 2023, sales growth in the aggregate (including discontinued operations) would be approximately flat to 1% on a reported basis and approximately 1% on a constant currency basis.
- Full-year 2023 adjusted earnings are expected to be negatively impacted by $0.10 per share if the BPS sale is completed, due to the absence of BPS earnings in the fourth quarter.
- Baxter has not provided reconciliations of forward-looking adjusted EPS guidance to GAAP EPS guidance due to the uncertainty and difficulty in predicting the combined impact and timing of potential charges or gains.
- Such items could have a substantial impact on GAAP measures of financial performance.
Revenue & Expenses
Visualization of income flow from segment revenue to net income