- First-quarter sales from continuing operations of $3.59 billion
increased 2% on a reported basis and 3% on a constant currency
basis, exceeding the company’s previously issued guidance1
- First-quarter U.S. GAAP2 diluted earnings per share (EPS) from
continuing operations were $0.07 and adjusted diluted EPS from
continuing operations were $0.65, exceeding the company’s
previously issued guidance
- Baxter now expects full-year 2024 sales growth of approximately
2% on a reported basis and 2% to 3% on a constant currency
basis
- Baxter now expects full-year adjusted EPS of $2.88 to
$2.981
- Recent U.S. FDA clearance of Novum IQ large volume
infusion pump and Dose IQ Safety Software advances connected
and intelligent infusion therapy portfolio
Baxter International Inc. (NYSE:BAX), a global medtech leader,
today reported results for the first quarter of 2024.
“Baxter’s results in the first quarter reflect the company’s
solid operational performance, fueled by the benefits being
realized from our ongoing strategic transformation initiatives,
including our new operating model structure, and continued strong
execution across our integrated supply chain network,” said José
(Joe) E. Almeida, chair, president and chief executive officer. “We
are squarely focused on improving our operational execution and
excited by the opportunities we are creating through recent
innovation milestones. Our objective remains to accelerate
performance and drive increased value for patients, healthcare
providers and shareholders.”
First-Quarter Financial Results
Worldwide sales from continuing operations in the first quarter
totaled $3.59 billion, an increase of 2% on a reported basis and 3%
on a constant currency basis, exceeding the company’s previously
issued guidance of approximately 1% on a reported basis and 1% to
2% on a constant currency basis. Continuing operations exclude
Baxter’s BioPharma Solutions (BPS) business, which was divested at
the end of the third quarter of 2023.
U.S. sales from continuing operations in the first quarter
totaled $1.66 billion, flat year-over-year on a reported basis.
International sales from continuing operations totaled $1.93
billion, an increase of 5% on both a reported basis and at constant
currency rates.
First-quarter sales performance was driven by
better-than-expected results across the majority of Baxter’s
business segments. Sales performance by segment was led by
double-digit growth in Pharmaceuticals, reflecting the impact of
new product launches and increased demand for Baxter’s Drug
Compounding services. Baxter’s Medical Products & Therapies and
Kidney Care segments both delivered mid-single-digit growth at
constant currency rates, reflecting the benefit of positive demand
and pricing across these two segments. This strong growth helped
offset a high single-digit decline in Baxter’s Healthcare Systems
& Technologies segment, reflecting the phasing of certain
orders to later in the year, timing of backlog reduction efforts in
the prior year period and softness in the U.S. primary care market,
as well as some operational challenges that are being addressed to
enhance the future performance of this segment. Growth for the
Healthcare Systems & Technologies segment is expected to
meaningfully improve in the second half of the year.
Please see the attached schedules accompanying this press
release for additional details on sales performance in the quarter,
including breakouts by Baxter’s segments.
For the first quarter, total net income attributable to Baxter
on a U.S. GAAP basis was $37 million, or $0.07 per diluted share.
Total U.S. GAAP diluted EPS includes $0.07 from continuing
operations. These results include special items totaling $294
million, primarily related to the impact of intangible
amortization, separation-related costs and business optimization
costs, among other factors. On an adjusted basis, excluding the
impact of special items, income from continuing operations was
$0.65 per diluted share, which exceeded the company’s previously
issued guidance of $0.59 to $0.62 per diluted share, driven by
top-line performance and operational execution across Integrated
Supply Chain.
Recent Highlights3
Baxter continues to advance key strategic priorities in pursuit
of its Mission to Save and Sustain Lives. Among recent highlights,
the company:
- Announced U.S. Food and Drug Administration (FDA) 510(k)
clearance of its Novum IQ large volume infusion pump (LVP)
with Dose IQ Safety Software. Adding LVP modality to the
Novum IQ Infusion Platform – which includes Baxter’s syringe
infusion pump (SYR) with Dose IQ Safety Software, powered by
the IQ Enterprise Connectivity Suite – integrates the user
experience across its LVP and SYR pumps and helps to reduce the
burden of non-critical tasks so that nurses, pharmacists and other
clinicians can spend more time focused on patient care. The
Novum IQ LVP and Novum IQ SYR are available to order
in the U.S.
- Announced the continued expansion of its Pharmaceuticals
portfolio with five injectable launches in the U.S. that reinforce
the company’s focus on differentiated products and address unmet
patient needs in key therapeutic areas. These launches include:
- Norepinephrine Bitartrate in 5% Dextrose Injection in a new 16
mg/250 mL strength
- Vasopressin in 0.9% Sodium Chloride Injection, the first and
only FDA-approved ready-to-use Vasopressin in a flexible
container
- Vancomycin Injection, USP in 5% Dextrose in new 1.25 g/250 mL
and 1.5 g/300 mL strengths
- Ropivacaine Hydrochloride Injection, USP in a ready-to-use,
single-dose infusion bag
- Regadenoson Injection in a pre-filled syringe
Kidney Care Separation Update
Baxter’s preparations continue for the proposed separation of
its Kidney Care segment. As announced on March 4, 2024, the company
is exploring a potential sale of the Kidney Care business in lieu
of a proposed spinoff of that business. No final decision on the
separation structure has been made. Regardless of the selected
path, Baxter currently expects the separation of its Kidney Care
business to take place in the second half of 2024.
2024 Financial Outlook
For full-year 2024: Baxter now
expects sales growth of approximately 2% on a reported basis and 2%
to 3% on a constant currency basis. The company expects adjusted
earnings, before special items, of $2.88 to $2.98 per diluted
share.
For second-quarter 2024: The
company expects sales growth of approximately 1% on a reported
basis and 2% to 3% on a constant currency basis. The company
expects adjusted earnings, before special items, of $0.65 to $0.67
per diluted share.
A webcast of Baxter’s first-quarter 2024 conference call for
investors can be accessed live from a link in the Investor
Relations section of the company’s website at www.baxter.com
beginning at 7:30 a.m. CDT on May 2, 2024. Please see
www.baxter.com for more information regarding this and future
investor events and webcasts.
About Baxter
Every day, millions of patients, caregivers and healthcare
providers rely on Baxter’s leading portfolio of diagnostic,
critical care, kidney care, nutrition, hospital and surgical
products used across patient homes, hospitals, physician offices
and other sites of care. For more than 90 years, we’ve been
operating at the critical intersection where innovations that save
and sustain lives meet the healthcare providers who make it happen.
With products, digital health solutions and therapies available in
more than 100 countries, Baxter’s employees worldwide are now
building upon the company’s rich heritage of medical breakthroughs
to advance the next generation of transformative healthcare
innovations. To learn more, visit www.baxter.com and follow us on
X/Twitter, LinkedIn and Facebook.
Non-GAAP Financial Measures
Non-GAAP financial measures may enhance an understanding of the
company’s operations and may facilitate an analysis of those
operations, particularly in evaluating performance from one period
to another. Management believes that non-GAAP financial measures,
when used in conjunction with the results presented in accordance
with U.S. GAAP and the company’s reconciliations to corresponding
U.S. GAAP financial measures (which are included in the tables
accompanying this release), may enhance an investor’s overall
understanding of the company’s past financial performance and
prospects for the future. Management uses these non-GAAP measures
internally in financial planning, to monitor business unit
performance, and, in some cases, for purposes of determining
incentive compensation. This information should be considered in
addition to, and not as substitutes for, information prepared in
accordance with U.S. GAAP.
Net sales growth on a constant currency basis is a non-GAAP
financial measure that provides information on the percentage
change in net sales growth as if foreign currency exchange rates
had remained constant between the prior and current periods.
Other non-GAAP financial measures included in this release and
the accompanying tables (including within the tables that provide
the company’s detailed reconciliations to the corresponding U.S.
GAAP financial measures) are: adjusted gross margin, adjusted
selling, general, and administrative expenses, adjusted research
and development expenses, adjusted other operating expense
(income), net, adjusted operating income (loss), adjusted other
income (expense), net, adjusted income (loss) from continuing
operations before income taxes, adjusted income tax expense
(benefit), adjusted income (loss) from continuing operations,
adjusted income (loss) from discontinued operations, adjusted net
income (loss), adjusted net income (loss) attributable to Baxter
stockholders, adjusted diluted earnings per share from continuing
operations, adjusted diluted earnings per share from discontinued
operations and adjusted diluted earnings per share. Those non-GAAP
financial measures exclude the impact of special items. For the
quarters ended March 31, 2024 and 2023, special items for one or
more periods included intangible asset amortization, business
optimization charges, acquisition and integration costs,
separation-related costs, expenses related to European medical
devices regulation, and certain tax matters. These items are
excluded because they are highly variable or unusual and of a size
that may substantially impact the company’s reported operations for
a period. Additionally, intangible asset amortization is excluded
as a special item to facilitate an evaluation of current and past
operating performance and is consistent with how management and the
company’s Board of Directors assess performance.
This release and the accompanying tables also include free cash
flow, a non-GAAP financial measure that Baxter defines as operating
cash flow less capital expenditures. Free cash flow is used by
management and the company’s Board of Directors to evaluate the
cash generated from Baxter’s operating activities each period after
deducting its capital spending.
This release also includes forecasts of certain of the
aforementioned non-GAAP measures on a forward-looking basis as part
of the company’s financial outlook for upcoming periods. Baxter
calculates forward-looking non-GAAP financial measures based on
forecasts that omit certain amounts that would be included in GAAP
financial measures. For instance, forward-looking adjusted diluted
EPS guidance excludes potential charges or gains that would be
reflected as non-GAAP adjustments to earnings. Baxter provides
forward-looking adjusted diluted EPS guidance because it believes
that this measure provides useful information for the reasons noted
above. Baxter has not provided reconciliations of forward-looking
adjusted EPS guidance to forward-looking GAAP EPS guidance because
the company is unable to predict with reasonable certainty the
impact of legal proceedings, future business optimization actions,
separation-related costs, integration-related costs, asset
impairments and unusual gains and losses, and the related amounts
are unavailable without unreasonable efforts (as specified in the
exception provided by Item 10(e)(1)(i)(B) of Regulation S-K). In
addition, Baxter believes that such reconciliations would imply a
degree of precision and certainty that could be confusing to
investors. Such items could have a substantial impact on GAAP
measures of financial performance.
Forward-Looking Statements
This release includes forward-looking statements concerning the
company’s financial results (including the outlook for
second-quarter and full-year 2024) and business development and
regulatory activities. These forward-looking statements are based
on assumptions about many important factors, including the
following, which could cause actual results to differ materially
from those in the forward-looking statements: the company’s ability
to execute and complete strategic initiatives, asset dispositions
and other transactions and development activities, including the
proposed separation of the company’s Kidney Care business, the
company’s plans to simplify its manufacturing footprint and the
timing for such transactions, the ability to satisfy any applicable
conditions and the expected proceeds, consideration and benefits;
failure to accurately forecast or achieve the company’s short- and
long-term financial performance and goals (including with respect
to the company’s strategic initiatives and other actions) and
related impacts on our liquidity; the company’s ability to execute
on its capital allocation plans, including the company’s debt
repayment plans, the timing and amount of any dividends, share
repurchases and divestiture proceeds and, if the company proceeds
with the separation of the Kidney Care business in the form of a
spinoff, the capital structure of the public company that would be
formed (and the resulting capital structure for the remaining
company); the company’s ability to successfully integrate
acquisitions; the impact of global economic conditions (including,
among other things, inflation levels, interest rates, financial
market volatility, banking crises, the potential for a recession,
the war in Ukraine, the conflict in the Middle East (including
attacks on merchant ships in the Red Sea), tensions amongst China,
Taiwan and the U.S., and the potential for escalation of these
conflicts, the related economic sanctions being imposed globally in
response to the conflicts and potential trade wars and global
public health crises, pandemics and epidemics, such as the COVID-19
pandemic, or the anticipation of any of the foregoing, on the
company’s operations and on the company’s employees, customers,
suppliers, and foreign governments in countries in which the
company operates; downgrades to the company’s credit ratings or
ratings outlooks, and the impact on the company’s funding costs and
liquidity; product development risks, including satisfactory
clinical performance and obtaining and maintaining required
regulatory approvals (including as a result of evolving regulatory
requirements or the withdrawal or resubmission of any pending
applications), the ability to manufacture at appropriate scale and
the general unpredictability associated with the product
development cycle; product quality or patient safety issues leading
to product recalls, withdrawals, launch delays, warning letters,
import bans, sanctions, seizures, litigation or declining sales,
including the focus on evaluating product portfolios for the
potential presence or formation of nitrosamines; future actions of,
or failures to act or delays in acting by, FDA, the European
Medicines Agency or any other regulatory body or government
authority (including the SEC, Department of Justice or the Attorney
General of any State) that could delay, limit or suspend product
development, manufacturing or sale or result in seizures, recalls,
injunctions, monetary sanctions or criminal or civil liabilities;
demand and market acceptance risks for, and competitive pressures
related to, new and existing products, challenges with the
company’s ability to accurately predict changing consumer
preferences and future expenditures and inventory levels, and
challenges with the company’s ability to monetize new and existing
products and services, the impact of those products on quality and
patient safety concerns and the need for ongoing training and
support for our products; breaches, including by cyber-attack, data
leakage, unauthorized access or theft, or failures of or
vulnerabilities in, the company’s information technology systems or
products; the continuity, availability and pricing of acceptable
raw materials and component parts, the company’s ability to pass
some or all of these costs to the company’s customers through
recent price increases or otherwise, and the related continuity of
the company’s manufacturing and distribution and those of the
company’s suppliers; inability to create additional production
capacity in a timely manner or the occurrence of other
manufacturing, sterilization or supply difficulties, including as a
result of natural disaster, war, terrorism, global public health
crises and epidemics/pandemics, regulatory actions or otherwise;
the company’s ability to finance and develop new products or
enhancements on commercially acceptable terms or at all; loss of
key employees, the occurrence of labor disruptions (including as a
result of labor disagreements under bargaining agreements or
national trade union agreements or disputes with works councils) or
the inability to attract, develop, retain and engage employees;
failures with respect to the company’s quality, compliance or
ethics programs; future actions of third parties, including
third-party payers and the company’s customers and distributors
(including GPOs and IDNs); changes to legislation and regulation
and other governmental pressures in United States and globally,
including the cost of compliance and potential penalties for
purported noncompliance thereof, including new or amended laws,
rules and regulations as well as the impact of healthcare reform
and its implementation, suspension, repeal, replacement, amendment,
modification and other similar actions undertaken by the United
States or foreign governments, including with respect to pricing,
reimbursement, taxation and rebate policies; the outcome of pending
or future litigation; the impact of competitive products and
pricing, including generic competition, drug reimportation and
disruptive technologies; global regulatory, trade and tax policies,
including with respect to climate change and other sustainability
matters; the ability to protect or enforce the company’s patents or
other proprietary rights (including trademarks, copyrights, trade
secrets and know-how) or where the patents of third parties prevent
or restrict the company’s manufacture, sale or use of affected
products or technology; the impact of any goodwill, intangible
asset or other long-lived asset impairments on the company’s
operating results; fluctuations in foreign exchange and interest
rates; any changes in law concerning the taxation of income
(whether with respect to current or future tax reform); actions by
tax authorities in connection with ongoing tax audits; and other
risks identified in Baxter’s most recent filings on Form 10-K and
Form 10-Q and other SEC filings, all of which are available on
Baxter’s website. Baxter does not undertake to update its
forward-looking statements unless otherwise required by the federal
securities laws.
Baxter, Dose IQ, IQ Enterprise and Novum IQ are trademarks of
Baxter International Inc.
Any other trademarks or product brands appearing herein are the
property of their respective owners.
________________________________
1 Sales growth at constant currency rates
and adjusted diluted EPS, as well as forecasts of those items on a
forward-looking basis, are non-GAAP financial measures. See the
“Non-GAAP Financial Measures” section below for information about
the non-GAAP financial measures included in this release and see
the accompanying tables to this press release for reconciliations
of those non-GAAP measures to the corresponding U.S. GAAP
measures.
2 Generally Accepted Accounting
Principles
3 See links to original press releases for
additional product information.
BAXTER INTERNATIONAL
INC.
Consolidated Statements of
Income
(unaudited)
(in millions, except per share
and percentage data)
Three Months Ended March 31,
2024
2023
Change
NET SALES
$
3,592
$
3,513
2%
COST OF SALES
2,205
2,238
(1)%
GROSS MARGIN
1,387
1,275
9%
% of Net Sales
38.6
%
36.3
%
2.3 pts
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
1,027
995
3%
% of Net Sales
28.6
%
28.3
%
0.3 pts
RESEARCH AND DEVELOPMENT
EXPENSES
176
164
7%
% of Net Sales
4.9
%
4.7
%
0.2 pts
OTHER OPERATING INCOME, NET
(3
)
(13
)
(77)%
OPERATING INCOME
187
129
45%
% of Net Sales
5.2
%
3.7
%
1.5 pts
INTEREST EXPENSE, NET
78
117
(33)%
OTHER INCOME, NET
(7
)
(2
)
NM
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
116
14
NM
INCOME TAX BENEFIT
77
14
NM
% of Income from Continuing Operations
Before Income Taxes
66.4
%
100.0
%
(33.6) pts
INCOME FROM CONTINUING
OPERATIONS
39
—
NM
INCOME FROM DISCONTINUED OPERATIONS,
NET OF TAX
—
45
(100)%
NET INCOME
39
45
(13)%
NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
2
1
100%
NET INCOME ATTRIBUTABLE TO BAXTER
STOCKHOLDERS
$
37
$
44
(16)%
INCOME FROM CONTINUING OPERATIONS PER
COMMON SHARE
Basic
$
0.07
$
0.00
NM
Diluted
$
0.07
$
0.00
NM
INCOME FROM DISCONTINUED OPERATIONS PER
COMMON SHARE
Basic
$
0.00
$
0.09
(100)%
Diluted
$
0.00
$
0.09
(100)%
NET INCOME PER COMMON SHARE
Basic
$
0.07
$
0.09
(22)%
Diluted
$
0.07
$
0.09
(22)%
WEIGHTED-AVERAGE NUMBER OF SHARES
OUTSTANDING
Basic
508
505
Diluted
510
505
ADJUSTED OPERATING INCOME (excluding
special items)¹
$
515
$
439
17%
ADJUSTED INCOME FROM CONTINUING
OPERATIONS (excluding special items)¹
$
333
$
249
34%
ADJUSTED INCOME FROM DISCONTINUED
OPERATIONS (excluding special items)1
$
—
$
49
(100)%
ADJUSTED NET INCOME ATTRIBUTABLE TO
BAXTER STOCKHOLDERS (excluding special items)¹
$
331
$
297
11%
ADJUSTED DILUTED EPS FROM CONTINUING
OPERATIONS (excluding special items)¹
$
0.65
$
0.49
33%
ADJUSTED DILUTED EPS FROM DISCONTINUED
OPERATIONS (excluding special items)¹
$
0.00
$
0.10
(100)%
ADJUSTED DILUTED EPS (excluding special
items)¹
$
0.65
$
0.59
10%
1Refer to page 9 for a description of the
adjustments and a reconciliation to U.S. GAAP measures.
NM - Not Meaningful
BAXTER INTERNATIONAL
INC.
Description of Adjustments and
Reconciliation of U.S. GAAP to Non-GAAP Measures
(unaudited, in
millions)
The company’s U.S. GAAP results for the
three months ended March 31, 2024 included special items which
impacted the U.S. GAAP measures as follows:
Gross Margin
Selling, General and
Administrative Expenses
Research and Development
Expenses
Operating Income
Income From Continuing Operations
Before Income Taxes
Income Tax Expense (Benefit)
Income From Continuing
Operations
Net Income
Net Income Attributable to Baxter
Stockholders
Diluted Earnings Per Share from
Continuing Operations
Diluted Earnings Per Share
Reported
$
1,387
$
1,027
$
176
$
187
$
116
$
77
$
39
$
39
$
37
$
0.07
$
0.07
Reported percent of net sales (or
effective tax rate for income tax expense)
38.6
%
28.6
%
4.9
%
5.2
%
3.2
%
66.4
%
1.1
%
1.1
%
1.0
%
Intangible asset amortization
114
(52
)
—
166
166
40
126
126
126
0.25
0.25
Business optimization items1
14
(27
)
(16
)
57
57
15
42
42
42
0.08
0.08
Acquisition and integration items2
1
(4
)
—
5
5
1
4
4
4
0.01
0.01
Separation-related costs3
4
(88
)
—
92
92
13
79
79
79
0.15
0.15
European medical devices regulation4
8
—
—
8
8
2
6
6
6
0.01
0.01
Tax matters5
—
—
—
—
—
(37
)
37
37
37
0.07
0.07
Adjusted
$
1,528
$
856
$
160
$
515
$
444
$
111
$
333
$
333
$
331
$
0.65
$
0.65
Adjusted percent of net sales (or
effective tax rate for income tax expense)
42.5
%
23.8
%
4.5
%
14.3
%
12.4
%
25.0
%
9.3
%
9.3
%
9.2
%
Reported
Adjusted
Net income
$
39
$
333
Less: Net income attributable to
noncontrolling interests
2
2
Net income attributable to Baxter
stockholders
$
37
$
331
The company’s U.S. GAAP results for the
three months ended March 31, 2023 included special items which
impacted the U.S. GAAP measures as follows:
Gross Margin
Selling, General and
Administrative Expenses
Research and Development
Expenses
Other Operating Income, Net
Operating Income
Income From Continuing Operations
Before Income Taxes
Income Tax Expense (Benefit)
Income From Continuing
Operations
Income From Discontinued
Operations
Net Income
Net Income Attributable to Baxter
Stockholders
Diluted Earnings Per Share from
Continuing Operations
Diluted Earnings Per Share from
Discontinued Operations
Diluted Earnings Per Share
Reported
$
1,275
$
995
$
164
$
(13
)
$
129
$
14
$
14
$
—
$
45
$
45
$
44
$
0.00
$
0.09
$
0.09
Reported percent of net sales (or
effective tax rate for income tax expense)
36.3
%
28.3
%
4.7
%
(0.4
)%
3.7
%
0.4
%
100.0
%
0.0
%
1.3
%
1.3
%
1.3
%
Intangible asset amortization
110
(52
)
—
—
162
162
36
126
—
126
126
0.25
0.00
0.25
Business optimization items1
35
(92
)
(7
)
—
134
134
27
107
—
107
107
0.21
0.00
0.21
Acquisition and integration items2
—
(6
)
—
13
(7
)
(7
)
(2
)
(5
)
—
(5
)
(5
)
(0.01
)
0.00
(0.01
)
Separation-related costs3
1
(8
)
—
—
9
9
—
9
7
16
16
0.02
0.01
0.03
European medical devices regulation4
12
—
—
—
12
12
3
9
—
9
9
0.02
0.00
0.02
Tax matters5
—
—
—
—
—
—
(3
)
3
(3
)
—
—
0.01
(0.01
)
0.00
Adjusted
$
1,433
$
837
$
157
$
—
$
439
$
324
$
75
$
249
$
49
$
298
$
297
$
0.49
$
0.10
$
0.59
Adjusted percent of net sales (or
effective tax rate for income tax expense)
40.8
%
23.8
%
4.5
%
0.0
%
12.5
%
9.2
%
23.1
%
7.1
%
1.4
%
8.5
%
8.5
%
Reported
Adjusted
Income (loss) from continuing
operations
$
—
$
249
Less: Net income attributable to
noncontrolling interests
1
1
Income (loss) from continuing operations
attributable to Baxter stockholders
$
(1
)
$
248
Weighted-average diluted shares as
reported
505
Effect of dilutive securities that were
anti-dilutive to dilutive EPS as reported
2
Weighted-average diluted shares as
adjusted
507
1
The company’s results in 2024 and 2023
included costs related to programs to optimize its organization and
cost structure. In 2024, these costs primarily related to a program
to centralize certain of its research and development activities
into a new location and, to a lesser extent, the implementation of
a new operating model intended to streamline and simplify its
operations. In 2023, these costs primarily related to the
implementation of its new operating model.
2
The company’s results in 2024 and 2023
included acquisition and integration-related items comprised of
Hillrom acquisition and integration expenses. In 2023 those costs
are offset by net gains from changes in the fair value of
contingent consideration liabilities.
3
The company's results in 2024 and 2023
included separation-related costs primarily related to external
advisors supporting its activities to prepare for the proposed
separation of its Kidney Care segment, which are reported in
continuing operations. The company's results in 2023 also included
separation-related costs related to the sale of its BioPharma
Solutions (BPS) business, which are reported in discontinued
operations.
4
The company’s results in 2024 and 2023
included incremental costs to comply with the European Union’s
medical device regulations for previously registered products,
which primarily consist of contractor costs and other direct
third-party costs. The company considers the adoption of these
regulations to be a significant one-time regulatory change and
believes that the costs of initial compliance for previously
registered products over the implementation period are not
indicative of its core operating results.
5
The company’s results in 2024 included
income tax expenses resulting from internal reorganization
transactions related to the proposed separation of its Kidney Care
segment. The company’s results in 2023 included a reallocation of
income tax expense between discontinued operations and continuing
operations resulting from the application of intraperiod tax
allocation to its adjusted results in an interim period.
For more information on the
company's use of non-GAAP financial measures, please see the
Non-GAAP Financial Measures section of this press release.
BAXTER INTERNATIONAL INC.
Sales by Operating Segment
(unaudited)
($ in millions)
The Medical Products and Therapies segment includes sales of our
sterile IV solutions, infusion systems, administration sets,
parenteral nutrition therapies and surgical hemostat, sealant and
adhesion prevention products. The Healthcare Systems and
Technologies segment includes sales of our connected care solutions
and collaboration tools, including smart bed systems, patient
monitoring systems and diagnostic technologies, respiratory health
devices and advanced equipment for the surgical space, including
surgical video technologies, precision positioning devices and
other accessories. The Pharmaceuticals segment includes sales of
specialty injectable pharmaceuticals, inhaled anesthesia and drug
compounding. The Kidney Care segment includes sales of chronic and
acute dialysis therapies and services, including peritoneal
dialysis, hemodialysis, continuous renal replacement therapies
(CRRT) and other organ support therapies. Other sales not allocated
to a segment primarily include sales of products and services
provided directly through certain of our manufacturing
facilities.
Three Months Ended March 31,
% Growth @ Actual Rates
% Growth @ Constant Rates
2024
2023
Infusion Therapies and Technologies
$
966
$
911
6
%
6
%
Advanced Surgery
263
246
7
%
8
%
Medical Products and Therapies
1,229
1,157
6
%
6
%
Care and Connectivity Solutions
402
429
(6
)%
(7
)%
Front Line Care
265
302
(12
)%
(12
)%
Healthcare Systems and Technologies
667
731
(9
)%
(9
)%
Injectables and Anesthesia
328
305
8
%
8
%
Drug Compounding
250
218
15
%
15
%
Pharmaceuticals
578
523
11
%
11
%
Chronic Therapies
888
884
0
%
2
%
Acute Therapies
214
188
14
%
15
%
Kidney Care
1,102
1,072
3
%
4
%
Other
16
30
(47
)%
(47
)%
Total - Continuing Operations
$
3,592
$
3,513
2
%
3
%
In connection with our segment change in the third quarter of
2023, we reclassified $8 million of sales from the first quarter of
2023 from Chronic Therapies to Acute Therapies to conform to the
current period presentation. Additionally, in connection with the
reclassification of our BPS business to discontinued operations
during the second quarter of 2023, we reclassified $2 million of
contract manufacturing revenues from the first quarter of 2023 from
BPS to Other (within continuing operations), as the related
manufacturing facility was not part of that divestiture
transaction.
Constant currency growth is a non-GAAP measure. For more
information on the company’s use of non-GAAP financial measures,
please see the Non-GAAP Financial Measures section of this press
release.
BAXTER INTERNATIONAL
INC.
Segment Operating
Income
(unaudited)
($ in millions)
Three Months Ended March 31,
2024
2023
Medical Products and Therapies
$
227
$
197
% of Segment Net Sales
18.5
%
17.0
%
Healthcare Systems and Technologies
67
112
% of Segment Net Sales
10.0
%
15.3
%
Pharmaceuticals
78
87
% of Segment Net Sales
13.5
%
16.6
%
Kidney Care
159
57
% of Segment Net Sales
14.4
%
5.3
%
Other
4
7
Total
535
460
Unallocated corporate costs
(20
)
(21
)
Intangible asset amortization expense
(166
)
(162
)
Business optimization items
(57
)
(134
)
Acquisition and integration items
(5
)
7
Divestiture-related costs
(92
)
(9
)
European Medical Devices Regulation
(8
)
(12
)
Total operating income
187
129
Interest expense, net
78
117
Other income, net
(7
)
(2
)
Income from continuing operations before
income taxes
$
116
$
14
BAXTER INTERNATIONAL
INC.
Operating Segment Sales by
U.S. and International
(unaudited)
($ in millions)
Three Months Ended March 31,
2024
2023
% Growth
U.S.
International
Total
U.S.
International
Total
U.S.
International
Total
Infusion Therapies and Technologies
$
526
$
440
$
966
$
514
$
397
$
911
2
%
11
%
6
%
Advanced Surgery
147
116
263
144
102
246
2
%
14
%
7
%
Medical Products and Therapies
673
556
1,229
658
499
1,157
2
%
11
%
6
%
Care and Connectivity Solutions
278
124
402
298
131
429
(7
)%
(5
)%
(6
)%
Front Line Care
195
70
265
221
81
302
(12
)%
(14
)%
(12
)%
Healthcare Systems and Technologies
473
194
667
519
212
731
(9
)%
(8
)%
(9
)%
Injectables and Anesthesia
191
137
328
173
132
305
10
%
4
%
8
%
Drug Compounding
—
250
250
—
218
218
0
%
15
%
15
%
Pharmaceuticals
191
387
578
173
350
523
10
%
11
%
11
%
Chronic Therapies
226
662
888
229
655
884
(1
)%
1
%
0
%
Acute Therapies
85
129
214
64
124
188
33
%
4
%
14
%
Kidney Care
311
791
1,102
293
779
1,072
6
%
2
%
3
%
Other
11
5
16
24
6
30
(54
)%
(17
)%
(47
)%
Total - Continuing Operations
$
1,659
$
1,933
$
3,592
$
1,667
$
1,846
$
3,513
(0
)%
5
%
2
%
BAXTER INTERNATIONAL
INC.
Reconciliation of Non-GAAP
Financial Measure
Operating Cash Flow to Free
Cash Flow
(unaudited)
($ in millions)
Three Months Ended March 31,
2024
2023
Cash flows from operations – continuing
operations
$
163
$
469
Cash flows from investing activities -
continuing operations
(166
)
(163
)
Cash flows from financing activities -
continuing operations
(140
)
(372
)
Cash flows from operations - continuing
operations
$
163
$
469
Capital expenditures - continuing
operations
(176
)
(165
)
Free cash flow - continuing
operations
$
(13
)
$
304
Three Months Ended March 31,
2024
2023
Cash flows from operations – discontinued
operations
$
—
10
Cash flows from investing activities -
discontinued operations
—
(7
)
Cash flows from operations - discontinued
operations
$
—
$
10
Capital expenditures - discontinued
operations
—
(7
)
Free cash flow - discontinued
operations
$
—
$
3
Three Months Ended March 31,
2024
2023
Cash flows from operations – Total
Baxter
$
163
$
479
Cash flows from investing activities -
Total Baxter
(166
)
(170
)
Cash flows from financing activities -
Total Baxter
(140
)
(372
)
Cash flows from operations - Total
Baxter
$
163
$
479
Capital expenditures - Total Baxter
(176
)
(172
)
Free cash flow - Total Baxter
$
(13
)
$
307
Free cash flow is a non-GAAP measure. For
more information on the company’s use of non-GAAP financial
measures, please see the Non-GAAP Financial Measures section of
this press release.
BAXTER INTERNATIONAL
INC.
Reconciliation of Non-GAAP
Financial Measure
Change in Net Sales Growth As
Reported to Constant Currency Sales Growth
From the Three Months Ended
March 31, 2023 to the Three Months Ended March 31, 2024
(unaudited)
Net Sales Growth As Reported
FX
Constant Currency Sales
Growth*
Infusion Therapies and Technologies
6
%
0
%
6
%
Advanced Surgery
7
%
1
%
8
%
Medical Products and Therapies
6
%
0
%
6
%
Care and Connectivity Solutions
(6
)%
(1
)%
(7
)%
Front Line Care
(12
)%
0
%
(12
)%
Healthcare Systems and
Technologies
(9
)%
0
%
(9
)%
Injectables and Anesthesia
8
%
0
%
8
%
Drug Compounding
15
%
0
%
15
%
Pharmaceuticals
11
%
0
%
11
%
Chronic Therapies
0
%
2
%
2
%
Acute Therapies
14
%
1
%
15
%
Kidney Care
3
%
1
%
4
%
Other
(47
)%
0
%
(47
)%
Total - Continuing Operations
2
%
1
%
3
%
*Totals may not add across due to
rounding
Constant currency sales growth is a
non-GAAP measure. For more information on the company’s use of
non-GAAP financial measures, please see the Non-GAAP Financial
Measures section of this press release.
BAXTER INTERNATIONAL
INC.
Reconciliation of Non-GAAP
Financial Measures
Projected Second Quarter and
Full Year 2024 U.S. GAAP Sales Growth to Projected Constant
Currency Sales Growth and Projected Second Quarter and Full Year
2024 Adjusted Earnings Per Share
(unaudited)
Sales Growth Guidance
Q2 2024*
FY 2024*
Sales growth - U.S. GAAP
~1%
~2%
Foreign Exchange
> 100 bps
~ 50 bps
Sales growth - Constant currency
2% - 3%
2% - 3%
Adjusted Earnings Per Share
Guidance
Q2 2024
FY 2024*
Adjusted diluted EPS
$0.65 - $0.67
$2.88 - $2.98
*Totals may not foot due to
rounding
Baxter calculates forward-looking non-GAAP financial measures
based on forecasts that omit certain amounts that would be included
in GAAP financial measures. For instance, forward-looking adjusted
diluted EPS guidance excludes potential charges or gains that would
be reflected as non-GAAP adjustments to earnings. Baxter provides
forward-looking adjusted diluted EPS guidance because it believes
that this measure provides useful information for the reasons noted
in the accompanying release. Baxter has not provided
reconciliations of forward-looking adjusted EPS guidance to
forward-looking GAAP EPS guidance because the company is unable to
predict with reasonable certainty the impact of legal proceedings,
future business optimization actions, separation-related costs,
integration-related costs, asset impairments and unusual gains and
losses, and the related amounts are unavailable without
unreasonable efforts (as specified in the exception provided by
Item 10(e)(1)(i)(B) of Regulation S-K). In addition, Baxter
believes that such reconciliations would imply a degree of
precision and certainty that could be confusing to investors. Such
items could have a substantial impact on GAAP measures of financial
performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430194942/en/
Media Contact Andrea Johnson, (224) 948-5353
media@baxter.com
Investor Contact Clare Trachtman, (224) 948-3020
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