Baxter International Inc. (NYSE: BAX), a global leader in medical technology, today announced its financial results for the third quarter of 2024.
“Baxter achieved strong performance in Q3 2024 as we continue to execute on our strategic transformation,” said José (Joe) E. Almeida, Chair, President, and CEO. “The impending sale of our Kidney Care business marks another significant milestone, while our recovery efforts at the North Cove facility in North Carolina, impacted by Hurricane Helene, highlight the resilience of our team. Although the hurricane’s effects are expected to influence our near-term financial performance, we remain confident in Baxter’s growth trajectory following the completion of the Kidney Care divestiture.”
Third-Quarter Financial Results
Baxter’s third-quarter 2024 worldwide sales totaled $3.85 billion, with $2.70 billion from continuing operations and $1.15 billion from discontinued operations. Excluding 2023’s BioPharma Solutions (BPS) sales, worldwide sales grew 4% both on a reported and constant currency basis, in line with company guidance. However, with the inclusion of the BPS divestiture, total sales decreased 1% on both a reported and constant currency basis.
Sales from continuing operations increased 4%, driven by solid contributions across all business segments:
- Medical Products & Therapies grew in the high single digits, fueled by strong demand, particularly with the launch of the Novum IQ infusion pump.
- Healthcare Systems & Technologies experienced low single-digit growth, supported by strong performance in U.S. Care & Connectivity Solutions, though this was partially offset by international declines.
- Pharmaceuticals saw low single-digit growth, led by double-digit growth in the Drug Compounding division, although challenges in the Injectables & Anesthesia division dampened overall performance.
Kidney Care sales, now categorized as discontinued operations, grew in the mid-single digits, driven by robust demand for acute therapies and peritoneal dialysis products.
For Q3, net income attributable to Baxter was $140 million, or $0.27 per diluted share. Adjusted earnings, excluding special items, were $0.80 per diluted share, surpassing original guidance of $0.77 to $0.79, thanks to strong performance in Medical Products & Therapies and Kidney Care.
Hurricane Helene Recovery Efforts
Following the severe impact of Hurricane Helene on Baxter’s North Cove manufacturing facility in western North Carolina, which led to a temporary shutdown, the company has made substantial progress in restoring operations. The highest-throughput IV solutions manufacturing line has resumed, with new product shipments expected by the end of November, ahead of prior expectations. Baxter continues to work with government agencies to ensure supply continuity and recovery.
Kidney Care Business Sale Update
Baxter is on track to complete the sale of its Kidney Care business to Carlyle for $3.80 billion. The deal, expected to close in late 2024 or early 2025, will further accelerate Baxter’s strategic transformation. The company expects to receive $3.50 billion in cash, with after-tax proceeds projected to range between $3.15 and $3.25 billion.
Updated Financial Outlook
Due to the impact of Hurricane Helene on production, Baxter is adjusting its full-year 2024 financial outlook. The company expects total sales to grow 1% to 2% on a reported basis and 2% on a constant currency basis. Full-year adjusted earnings are now projected to be between $2.90 and $2.94 per diluted share.
For Q4 2024, Baxter expects low single-digit declines in sales and adjusted earnings of $0.77 to $0.81 per diluted share. The company continues to target 4% to 5% operational sales growth post-Kidney Care sale and expects a full-year 2025 adjusted operating margin of approximately 16.5%.
