Baxter (BAX) Misses Q4 EPS by 6c, Guidance Misses

Baxter (NYSE: BAX) reported Q4 EPS of $0.88, $0.06 worse than the analyst estimate of $0.94. Revenue for the quarter came in at $3.9 billion versus the consensus estimate of $3.77 billion.

GUIDANCE:

Baxter sees FY2023 EPS of $2.75-$2.95, versus the consensus of $3.56.

• For full-year 2023: Baxter expects sales growth of 1% to 2% on a reported basis and flat to 1% on a constant currency basis. The company expects U.S. GAAP earnings of $1.43 to $1.63 per diluted share and adjusted earnings, before special items, of $2.75 to $2.95 per diluted share. Guidance for 2023 reflects a challenging first half of the year due to increased cost of sales resulting from elevated costs of inventory produced in the second half of 2022, reflecting the significant inflationary pressures the company experienced, that will impact earnings when the related inventory is sold in 2023. Baxter expects the impact from these inflationary pressures on its earnings to begin to ease in the second half of the year. The benefits from the savings programs, which are in the process of being finalized, are expected to ramp over the course of the year, with the majority of the benefit being realized in the second half of the year. Finally, adjusted earnings guidance for 2023 also reflects incremental employee compensation costs, higher interest expense and an increased tax rate assumption as compared to full year 2022.

Baxter sees Q1 2023 EPS of $0.46-$0.50, versus the consensus of $0.76.

• For first-quarter 2023: The company expects sales to decline approximately 3% on a reported basis and 1% on a constant currency basis. The company expects U.S. GAAP earnings of $0.14 to $0.18 per diluted share and adjusted earnings, before special items, of $0.46 to $0.50 per diluted share.

For earnings history and earnings-related data on Baxter (BAX) click here.

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