Hot stock to watch: Baxter International Inc (NYSE: BAX)

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Baxter International Inc (NYSE: BAX) stock rose 12.49% on March 17th, 2020 (Source: Google finance) after the company delivered better than earnings estimate for the fourth quarter of FY 19. Baxter posted the gross profit of $1.29 billion in the fourth quarter, which represents an increase of 9.7% year over year. As a percentage of revenues, gross margin had expanded 90 bps on a year-over-year basis at 42.7% in the fourth quarter. Operating income rose 37.1% year over year to $536 million in the fourth quarter. The operating margin had expanded 380 bps to 17.6% in the fourth quarter.

BAX in the fourth quarter of FY 19 has reported the adjusted earnings per share of 97 cents, beating the analysts’ estimates for the adjusted earnings per share of 88 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 7.3 percent to $3.04 billion in the fourth quarter of FY 19, which is in line with the analysts’ estimates for revenue of $3.04 billion. Renal Care segment has reported 0.9% rise in revenues of $960 million in the quarter. Medication Delivery segment revenues rose by 17.8% to $775 million from the year-ago quarter and 19% at cc. Pharmaceuticals’ revenues rose 7.6% to $580 million from the year-ago quarter and 9% at cc.

For first-quarter 2020, the company expects the sales growth to be in the range of 4-5% on a reported basis, and 5-6% on both cc and operational basis. Adjusted earnings are expected to be in the range of 72-74 cents per diluted share. The Zacks Consensus Estimate is pegged at 81 cents. Due to the high-degree of uncertainty surrounding COVID-19 and any potential negative financial impacts from the same, Baxter had not issued any guidance for full-year 2020.

Meanwhile, the company had introduced the Sharesource 2.0 clinical portal that will help the healthcare providers to have better insights to patients’ home PD treatments while offering improved clinic workflow. Further, the company acquired Cheetah Medical which is expected to help in the expansion of Baxter’s presence in the specialized patient monitoring space.

Additionally, Baxter has initiated the U.S. and Canadian launches of its next-generation PrisMax system for continuous renal replacement therapy (CRRT) and therapeutic plasma exchange (TPE). The company has already received FDA approval for faster preparation of Floseal Hemostatic Matrix. In addition, the company has introduced Clinolipid (20% Lipid Injectable Emulsion), which is Baxter’s proprietary olive oil-based lipid emulsion, in the United States.

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