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Sep 30, 2024
Baxter Q3 2024 Earnings Report
Baxter's Q3 2024 performance reflected positive momentum, driven by strategic execution and growth across all segments, despite challenges from Hurricane Helene.
Key Takeaways
Baxter reported Q3 2024 sales of $3.85 billion, with $2.70 billion from continuing operations, a 4% increase year-over-year. GAAP EPS was $0.27, and adjusted EPS was $0.80, exceeding guidance. The company is progressing in restoring production at its North Cove facility after Hurricane Helene.
Total Baxter worldwide sales for Q3 2024 were $3.85 billion, which include continuing operations sales of $2.70 billion and discontinued operations sales of $1.15 billion.
Third-quarter total Baxter U.S. GAAP diluted earnings per share (EPS) were $0.27; adjusted total Baxter diluted EPS were $0.80, exceeding the company’s previously issued guidance.
On a continuing operations basis, Baxter’s sales of $2.70 billion increased 4% on both a constant currency and reported basis, with all segments contributing to this performance.
Baxter continues to make significant progress restoring production at its North Cove facility following the unprecedented impact of Hurricane Helene in western North Carolina; production has now restarted on the facility’s highest-throughput IV solutions manufacturing line
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CapyFin.com Forward Guidance
Baxter is adjusting its full-year 2024 financial outlook to reflect the estimated impact of Hurricane Helene on its fourth-quarter results. For full-year 2024, Baxter now expects total company sales growth of 1% to 2% on a reported basis and approximately 2% on a constant currency basis. The company expects total company adjusted earnings, before special items, of $2.90 to $2.94 per diluted share.
Positive Outlook
- Baxter reaffirms the preliminary financial expectations set when it announced its agreement to sell Kidney Care to Carlyle in August 2024.
- Following the completion of the pending sale of Kidney Care, Baxter is targeting operational sales growth of 4% to 5% annually.
- The company also anticipates a full-year 2025 adjusted operating margin of approximately 16.5% on a continuing operations basis
- The company currently expects to fully offset these stranded costs and loss of TSA income in 2027 through cost-containment initiatives, some of which are already underway, to further support the company's objective of delivering annual adjusted operating margin expansion.
- New product from North Cove could begin shipping to distributors and customers by the end of November, ahead of its original expectations.
Challenges Ahead
- Baxter expects total company fourth-quarter sales to be negatively impacted by approximately $200 million due to Hurricane Helene.
- Total company adjusted diluted EPS (including discontinued operations) are expected to be negatively impacted by $0.15 to $0.20 per share due to Hurricane Helene.
- For fourth-quarter 2024, the company expects sales to decline low single digits on both a reported basis and constant currency basis.
- The company expects total adjusted earnings, before special items, of $0.77 to $0.81 per diluted share for fourth quarter 2024.
- Following the reporting change moving Kidney Care business results to discontinued operations, corporate costs that had previously been allocated to the Kidney Care segment are now reported in unallocated corporate costs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income