Baxter (NYSE:BAX) today posted third-quarter results that were in line with estimates on Wall Street, but it lowered its outlook for the remainder of the year amid macroeconomic headwinds.
The Deerfield, Ill.–based company — maker of renal care products, drug delivery devices and more — also recorded impairment charges of $3.1 billion related to its $12.5 billion acquisition of Hillrom in December 2021. The charges reflect changes in macroeconomic factors, such as rising interest rates and broad declines in equity valuations, and the impact of current supply chain challenges for the legacy Hillrom businesses, according to Baxter.
As a result of the impairment charges, Baxter lost $2.9 billion, or $5.83 per share, on sales of $3.77 billion for the three months ended Sept. 30, 2022. The results swung Baxter to a large loss on sales growth of 16.96% compared with Q3 2021.
Adjusted to exclude one-time items, earnings per share were 82¢, in-line with estimates on Wall Street, where analysts were looking for sales of $3.77 billion.
“Baxter’s wide-ranging product portfolio is fundamental to healthcare globally, and at the heart of our sustained success over more than nine decades,” President and CEO José Almeida said in a news release. “We continue to navigate today’s challenging macroenvironment and have taken decisive action on multiple fronts to mitigate ongoing macroeconomic headwinds, while remaining focused on the needs of all our stakeholders – from patients, clinicians and customers to our employees and shareholders. Our vision for the company and fundamental strengths are intact. We remain confident in our ability to deliver innovation for patients, to realize the potential of the Hillrom acquisition and to continue strategically optimizing our portfolio.”
Baxter is updating its financial outlook for the year to reflect the continued impact from supply constraints for electromechanical components, foreign exchange pressures, increased interest expenses and a higher effective tax rate. For full-year 2022, Baxter now expects U.S. GAAP earnings to be a loss of $4.52 to $4.45 per diluted share and adjusted earnings before special items to be $3.53 to $3.60 per diluted share. It anticipates sales growth of 17–18% on a reported basis and approximately 23% on a constant currency basis.
Shares in BAX were down 5.83% to $54.27 apiece in afternoon trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was up slightly.