Baxter International (BAX) Q4 2024 earnings summary

Executive summary

• Q4 and full-year 2024 results exceeded guidance, with Q4 sales from continuing operations at $2.75B–$2.8B (up 1% reported, 2% constant currency) and full-year sales at $10.6B–$10.64B (up 3%), despite Hurricane Helene headwinds and rapid recovery at North Cove.

• Adjusted Q4 EPS from continuing operations was $0.58, above guidance, but down 11% year-over-year due to hurricane impact; full-year adjusted EPS was $1.89, up 11%.

• Completed the sale of Kidney Care (Vantive) business for $3.4B net proceeds, finalizing a three-step transformation plan.

• Leadership transition underway, with CEO retirement, interim CEO Brent Shafer, and new COO Heather Knight appointed.

Financial highlights

• Q4 2024 global sales from continuing operations were $2.75B–$2.8B (+1% reported, +2% constant currency); full-year sales reached $10.6B–$10.64B (+3%).

• Q4 adjusted gross margin was 44.5%; full-year adjusted gross margin was 43.5%.

• Q4 adjusted operating margin was 15.2%; full-year adjusted operating margin was 13.9%.

• Free cash flow for 2024 was $373M, down from $775M in 2023.

• Net interest expense for the year was $341M, down $98M due to debt repayment.

Outlook and guidance

• 2025 sales growth expected at 5%-6% reported, 4%-5% operationally, with negative FX and China IV exit impacts.

• Full-year 2025 adjusted EPS guidance is $2.45-$2.55; Q1 2025 adjusted EPS expected at $0.47-$0.50.

• Adjusted operating margin targeted at 16.5% for 2025.

• Free cash flow conversion expected in the low 70% range for 2025, normalizing after Q1.