Baxter reports mixed Q4 results, issues mixed guidance for FY24

Baxter International Inc. (NYSE: BAX), a global leader in medical devices and instruments, unveiled its financial outcomes for the fourth quarter and the entirety of 2023. The company witnessed a modest uptick in sales, culminating in full-year sales from ongoing operations at $14.81 billion, reflecting a 2% increase reported and a 3% elevation on a constant currency basis. Yet, the full-year U.S. GAAP diluted earnings per share (EPS) from continuing operations displayed a $0.15 loss, while the adjusted diluted EPS from continuing operations was pegged at $2.60.

Amidst the medical devices and instruments industry's hurdles, such as supply chain disruptions and changing healthcare regulations, Baxter's steady demand for its medically essential products and an improving macroeconomic landscape have bolstered its financial standing.

Throughout the year, Baxter achieved $1.70 billion in operating cash flow from continuing operations and $1.01 billion in free cash flow. Joel Grade, executive vice president and chief financial officer, emphasized the company's dedication to pushing forward its transformation journey and enhancing stakeholder value, noting substantial progress aligning with capital allocation goals.

The company is also making strides in the proposed spin-off of its Kidney Care segment into an independent entity, Vantive. This strategic move aims to sharpen focus and tailor investment priorities, potentially fast-tracking growth and innovation.

For 2024, Baxter anticipates approximately 2% sales growth on both reported and constant currency bases, with adjusted earnings before special items expected to range between $2.85 and $2.95 per diluted share. The first quarter of 2024 is projected to see about 1% sales growth reported and 1% to 2% on a constant currency basis, with adjusted earnings before special items forecasted to be between $0.59 and $0.62 per diluted share.

Baxter International Inc.'s financial performance for the fourth quarter and the entire year of 2023 reveals a resilient operation despite industry challenges. The company's ongoing transformation efforts and the anticipated separation of its Kidney Care segment underscore its commitment to growth and innovation in the forthcoming periods.

BAX shares gapped lower off the release and then staged a sharp rally to new multi-week highs back above the key $40 level.

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