Baxter International (BAX) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales grew 4% year-over-year on both reported and constant currency basis, with $3.85B total and $2.70B from continuing operations, in line with guidance and supported by all segments.

• Adjusted EPS for the quarter was $0.80 (total), $0.49 (continuing ops), both exceeding guidance, driven by strong segment performance, supply chain efficiency, and disciplined expense management.

• The North Cove facility, impacted by Hurricane Helene, saw key production lines restart ahead of schedule, with full operations expected by year-end.

• The Kidney Care business is classified as discontinued operations, with a pending $3.8B sale to Carlyle expected to close late 2024 or early 2025.

• Paid a quarterly dividend of $0.29 per share, maintaining commitment to shareholder returns.

Financial highlights

• Q3 2024 total sales: $3.85B; continuing operations: $2.70B, up 4% year-over-year; nine-month sales: $7.88B, up 3%.

• Adjusted EPS: $0.80 (total), $0.49 (continuing ops), up 18% and 14% year-over-year, respectively.

• Adjusted gross margin: 42.5% (total), 43.7% (continuing ops); GAAP gross margin: 38.3%.

• Adjusted operating margin: 15.6% (total), 14.5% (continuing ops); GAAP operating margin: 5.7%.

• Net income attributable to stockholders: $140M ($0.27/diluted share) GAAP; adjusted net income: $411M.

Outlook and guidance

• Full-year 2024 sales growth expected at 1–2% reported, ~2% constant currency; adjusted EPS guidance: $2.90–$2.94 (total), $1.81–$1.84 (continuing ops).

• Q4 2024 sales expected to decline low single digits due to hurricane impact; adjusted EPS: $0.77–$0.81 (total), $0.50–$0.53 (continuing ops).

• Hurricane Helene expected to reduce Q4 sales by ~$200M and adjusted EPS by $0.15–$0.20.

• 2025 guidance reaffirmed: 4–5% operational sales growth and ~16.5% adjusted operating margin post-Kidney Care separation.

• FY 2024 segment guidance: Medical Products & Therapies +2–3%, Healthcare Systems & Technologies decline low single digits, Pharmaceuticals ~7%.