- First-quarter revenue of $3.65 billion decreased 2% on a reported basis and increased 2% on a constant currency basis1
- First-quarter U.S. GAAP earnings per share (EPS) totaled $0.09; Adjusted EPS totaled $0.59
- Baxter expects full-year 2023 sales growth of 1% to 2% on a reported basis and ~1% on a constant currency basis
- Baxter expects full-year U.S. GAAP EPS of $1.16 to $1.31 and adjusted EPS of $2.85 to $3.00
Baxter International Inc. (NYSE:BAX), a global medtech leader, today reported results for the first quarter of 2023.
“Baxter’s performance in the first quarter reflects sustained demand for our medically essential products amid a stabilizing macroeconomic climate and healthcare marketplace,” said José (Joe) E. Almeida, chairman, president and chief executive officer. “I am confident that the transformational actions announced earlier this year, and currently underway, will help us advance our performance, fueling enhanced agility, efficiency, and resilience as we navigate an evolving landscape. Our goal, as always, is to drive increasing impact and value for the patients, clinicians, investors and numerous other stakeholder communities that depend on us.”
First-Quarter Financial Results
Worldwide sales in the first quarter totaled approximately $3.65 billion, a decrease of 2% on a reported basis and an increase of 2% on a constant currency basis, exceeding the company’s previously issued guidance.
Sales in the U.S. totaled $1.73 billion, decreasing 1% on a reported basis. International sales of $1.92 billion decreased 2% on a reported basis and increased 4% at constant currency rates.
Sales performance at constant currency rates reflects overall positive demand across the portfolio, supported by a continued recovery in patient and procedure volumes following the height of the COVID-19 pandemic, in combination with generally stabilizing macroeconomic conditions and an improvement in recent supply chain challenges. Sales growth in the quarter was primarily driven by strength in Advanced Surgery, Front Line Care, Pharmaceuticals and Renal Care. First-quarter performance was partially offset by expected declines in Acute Therapies and BioPharma Solutions as well as in Patient Support Systems, which reflected a slowdown in capital spending for certain healthcare products.
Please see the attached schedules accompanying this press release for additional details on sales performance in the quarter, including breakouts by Baxter’s product categories and segments.
For the first quarter, net income attributable to Baxter was $44 million, or $0.09 per diluted share, a decline of 36% on a U.S. GAAP (Generally Accepted Accounting Principles) basis. These results include special items totaling $253 million after tax, which were primarily related to intangible asset amortization, business optimization and separation costs. On an adjusted basis, net income attributable to Baxter totaled $297 million, or $0.59 per diluted share, a 37% decrease. Results in the quarter exceeded the company’s previously issued guidance, driven primarily by better-than-expected sales performance.
Advancing Strategic Transformation Initiatives
Baxter continues to execute against a range of strategic objectives announced in early 2023, focused on enhancing patient outcomes, innovation, efficiency and long-term shareholder value:
- The company is implementing a new operating model to realign its 10 businesses, region-based commercial geographies, and centralized manufacturing and supply chain operations into four vertically integrated global business segments: Medical Products and Therapies; Healthcare Systems and Technologies; Pharmaceuticals and BioPharma Solutions; and Kidney Care (through completion of the proposed spinoff). The company believes this new model will help fuel greater performance through enhanced strategic clarity, accountability, speed and innovation across the new segments. Baxter expects to report quarterly performance in line with the new operating model beginning in the second half of 2023.
- Progress is advancing on the proposed spinoff of Baxter’s Kidney Care segment (comprised of the company’s Renal Care and Acute Therapies product categories) into an independent, publicly traded company, with a preliminary operating model and organizational design now identified. The spinoff is currently expected to occur by July 2024 or earlier, subject to customary conditions.
Business Highlights2
Baxter continues to advance its strategic priorities in pursuit of its Mission to Save and Sustain Lives. Among recent highlights, the company:
- Resubmitted the Novum IQ large volume pump (LVP) for U.S. FDA 510(k) clearance. The pump is part of Baxter’s leading edge Novum IQ infusion platform, which includes both large volume and syringe (SYR) infusion pumps. The platform features Baxter’s Dose IQ Safety Software and IQ Enterprise Connectivity Suite, intuitive digital health technologies developed to protect patients, manage devices, and provide advanced insights. The Novum IQ SYR is now in use in the U.S.
- Launched ZOSYN (piperacillin and tazobactam) Injection premix in the U.S. Zosyn premix is indicated for the treatment of multiple infections caused by susceptible bacteria and is available in Baxter’s proprietary single-dose Galaxy containers, which enable premixed medications to have a longer shelf life. Its frozen premix formulation helps support patient safety, simplify medication preparation and improve operational efficiencies.
- Commercially launched the new Baxter Patient Warming system, which minimizes risks associated with forced air warming, reduces noise and waste in the operating room, and lessens the burden on clinician workflows. The updated system eliminates the need for disposables, as the warming technology is built into the table pad and employs reusable conductive warming blankets that can reach temperatures of 43 degrees Celsius.
- Launched Floseal + Recothrom, the first and only active flowable hemostat with a recombinant thrombin, resulting in 1.5 times faster preparation. Floseal + Recothrom has a thrombin component manufactured using recombinant DNA technology, and therefore contains no human blood components and eliminates reliance on human blood donations.
- Introduced the ReadyConnect System for Baxter’s Centrella Smart+ Bed. This innovative system delivers reliable, cable-free connectivity between the hospital bed and most nurse call systems on the market, and requires no wireless network, incremental server software licenses, or other IT resources from the customer.
- Launched ExactaMix Pro, a next generation automated nutrition compounder. This new technology builds on Baxter’s original, industry leading ExactaMix automated nutrition compounder, which has been used in 1,000+ hospitals and compounding centers to create more than 100 million bags of medications customized to individual patients’ needs. ExactaMix Pro offers a wide array of enhancements designed to strengthen security, improve customer experience and offer stronger data reporting capabilities. It is also the first and, to date, only automated compounder certified to the U.S. FDA-recognized UL 2900-2-1 cybersecurity standard.
- Announced a collaborative research agreement with life sciences company Miromatrix to help support additional treatment options for patients with acute liver failure (ALF). Miromatrix has developed a new therapy called miroliverELAP, which combines its single-use bioengineered liver with Baxter’s PrisMax system and is designed to provide external support to the patient’s native liver as a bridge to transplant or bridge to recovery. The agreement includes an intended Phase I clinical trial designed to generate key evidence to support additional therapeutic options for patients.
Among recent corporate responsibility highlights, Baxter and the Baxter International Foundation advanced support for disaster relief in response to February’s devastating earthquake in Turkey and Syria. Support included cash grants and product donations managed through humanitarian partners Direct Relief and Americares.
2023 Financial Outlook
For full-year 2023: Baxter now expects U.S. GAAP earnings of $1.16 to $1.31 per diluted share and adjusted earnings, before special items, of $2.85 to $3.00 per diluted share. The company expects sales growth of 1% to 2% on a reported basis and approximately 1% on a constant currency basis.
For second-quarter 2023: The company expects sales growth of approximately 1% to 2% on a reported basis and 2% to 3% on a constant currency basis. The company expects U.S. GAAP earnings of $0.18 to $0.20 per diluted share and adjusted earnings, before special items, of $0.59 to $0.61 per diluted share.
First-Quarter 2023 Earnings Conference Call
A webcast of Baxter’s first-quarter 2023 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 April 27, 2023. Please see www.baxter.com for more information regarding this and future investor events and webcasts.
