Baxter International on Thursday raised its annual profit forecast and beat estimates for first-quarter earnings on strong sales in its renal care unit, sending its shares up nearly 2% before the bell.
The much-awaited recovery in elective surgeries due to the easing of staffing shortages has helped drive a surge in hospital admissions, boosting demand for medical devices.
The Deerfield, Illinois-based company now expects full-year adjusted profit in the range of $2.85 to $3 per share, compared with its earlier forecast of $2.75 to $2.95 per share. Analysts estimate $2.86 per share, according to Refinitiv.
Baxter, which manufactures dialysis products and infusion pumps, reported quarterly revenue of $3.65 billion, slightly above analysts’ average estimate of $3.60 billion.
Sustained demand for company’s medically essential products in combination with stabilizing macroeconomic environment and an improvement in recent supply chain challenges has helped boost quarterly sales, the company said.
This compares with Baxter’s comments from the last quarter results, when it flagged pressure from inflation and higher inventory costs to continue this year and had reduced up to 5% of its global workforce.
On adjusted basis, the company earned 59 cents per share in the quarter through March, compared with analysts’ average estimate of 49 cents per share.
“The beat and raise to start 2023 is a step in the right direction for Baxter, with numbers hopefully only continuing to move up from here, and ultimately returning to prior trend levels,” J.P.Morgan analyst Robbie Marcus said in a note.
Spin-off of kidney care segment expected to occur by July 2024 or earlier, Baxter said.
The company said in January it is also exploring alternatives for its biopharma solutions business, including a potential sale.
(Reporting by Vaibhav Sadhamta and Sriparna Roy; Editing by Shweta Agarwal)
