SECOND-QUARTER 2024 EARNINGS Baxter International Inc. August 6, 2024 1 FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements concerning the company's financial results (including the outlook for third-quarter and full-year 2024) and business development and regulatory activities. These forward-looking statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking st ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________________________________________________________________ FORM 10-Q _________________________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 BAXTER INTERNATIONAL INC. FORM 10-Q For the quarterly period ended June 30, 2024 TABLE OF CONTENTS | | | Page Number | | --- | --- ...

BAXTER REPORTS SECOND-QUARTER 2024 RESULTS DEERFIELD, Ill., AUG. 6, 2024 – Baxter International Inc. (NYSE:BAX), a global medtech leader, today reported results for the second quarter of 2024. "Baxter's strategic transformation continues to gain momentum and drive performance benefiting our broad range of stakeholders," said José (Joe) E. Almeida, chair, president and chief executive officer. "In addition to delivering positive top-line and bottom-line results in Q2 2024, Baxter's portfolio of medically ess ...

Core Insights - The medical sector has shown strong improvements in both top and bottom lines for Q2, driven by increased demand and favorable pricing strategies, despite rising costs and geopolitical issues [2][3]. Industry Overview - 49.2% of medical companies, representing 61% of the sector's market capitalization, reported earnings by July 31, with 82.8% beating earnings expectations and 79.2% exceeding revenue forecasts. The sector's bottom line rose by 31% year-over-year, supported by a 5.8% increase in revenues [2]. - Overall, Q2 earnings for the medical sector are projected to improve by 15.7% with an 8.1% growth in revenues, contrasting with a 24% decline in Q1 earnings despite a 6.8% revenue increase [3]. Factors Influencing MedTech - The MedTech industry is experiencing growth due to the adoption of generative AI and digital therapies, alongside macro trends such as an aging population and increased healthcare awareness [4]. - Challenges include staffing shortages, rising medical supply costs, fluctuating demand for medical products, and supply chain issues exacerbated by geopolitical tensions [5]. Company-Specific Insights Baxter International - Baxter is expected to report Q2 revenues of $3.74 billion, reflecting a 1% increase year-over-year, with earnings estimated at 66 cents per share, indicating a 20% improvement [6]. - The company’s shares fell by 23.2% during the quarter, while the industry saw a 3.3% decline [7]. Henry Schein - Henry Schein's Q2 revenues are projected at $3.28 billion, a 5.9% increase from the previous year, with earnings expected to be $1.27 per share, down 3.1% year-over-year [8]. - The stock declined by 13.7% in Q2, compared to a 5.8% industry decline [9]. IDEXX Laboratories - IDEXX anticipates Q2 revenues of $1 billion, a 6.2% increase year-over-year, with earnings expected at $2.87 per share, up 7.5% from the previous year [10]. - The company’s shares dropped by 8.5% in Q2, while the industry experienced a 1.6% decline [11].

Analysts on Wall Street project that Baxter International (BAX) will announce quarterly earnings of $0.66 per share in its forthcoming report, representing an increase of 20% year over year. Revenues are projected to reach $3.74 billion, increasing 1% from the same quarter last year.Over the last 30 days, there has been a downward revision of 0.2% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial for ...

Baxter International Inc. (BAX) announced the launch of its Helion Integrated Surgical System in Thailand. This innovative system leverages advanced operating room integration (ORI) to simplify the complexities of surgical environments. By enhancing OR efficiency and enabling surgical teams to stay focused and connected, the Helion system represents a significant advancement in medical technology.The Helion Integrated Surgical System was launched by Hillrom in the U.S. market in 2021. Besides Thailand, the ...

Core Viewpoint - The healthcare sector remains attractive for growth and income due to inelastic demand for products and services, with Baxter International becoming a more appealing investment following a significant decline in stock valuation [2][5]. Company Background and Recent Earnings Results - Baxter International develops and sells a variety of healthcare products, including medical devices and connected care service devices, utilized in various care facilities [6]. - For Q1 2024, Baxter reported revenue of $3.6 billion, a decrease of 1.6% year-over-year, but slightly above analyst expectations. Adjusted earnings-per-share increased to $0.65 from $0.59 in the prior year, exceeding expectations by $0.02 [6][10]. - All segments showed growth except for Healthcare Systems & Technologies, which faced order delays and tough comparisons [7][8]. Segment Performance - Medical Products & Therapies revenue grew by 6% to $1.229 billion, while Healthcare Systems & Technologies revenue fell by 9% to $667 million. Kidney Care revenue increased by 3% to $1.102 billion [9]. - Despite challenges, the adjusted operating margin expanded by 180 basis points to 14.3% due to strong performance in Kidney Care and Medical Products & Therapies [9][11]. Future Guidance and Earnings Outlook - Baxter raised its full-year adjusted earnings-per-share guidance to a range of $2.88 to $2.98, up from a previous range of $2.85 to $2.95, with revenue growth projected at 2% to 3% in constant currency [10][14]. - Analysts expect double-digit earnings growth for 2024, with a compound annual growth rate of 8.2% since the spinoff of its biotech business in 2015 [14][15]. Dividend and Valuation Analysis - Baxter has a strong history of returning capital to investors, with a current annual dividend payment of $1.16 and a payout ratio of 40%, which is higher than the average since 2019 but still reasonable [16]. - The stock currently yields 3.4%, significantly above its five-year average of 1.8%, attributed to a decrease in share price. Baxter trades at a forward price-to-earnings ratio of 11.6, well below its historical average of 20 [16][19]. - The potential sale of its Kidney Care business, which has low margins, could improve overall profitability and support the dividend [16][19]. Final Thoughts - Baxter's stock has underperformed over the past year, leading to a valuation that is nearly half of its historical trading levels. The planned divestiture of its lowest margin business is expected to enhance focus on more profitable segments [19]. - With earnings estimates indicating sustainable double-digit growth, there is potential for multiple expansion, making Baxter an attractive value play in the medtech sector [19].

Shares of Baxter International Inc (NYSE:BAX) are down 2.9% at $34.28, after a downgrade from Morgan Stanley to "underweight" from "equal weight," with a price-target cut to $30 from $39. The firm raised concerns over the medical equipment name's margin goals, noting its financial outlook may be more challenging than previously thought, particularly after its acquisition of Hillrom. On the charts, support at the $33 level kept losses in check over the past couple months. However, overhead pressure at the 60 ...

Company Overview - Baxter International's shares have increased by 2.4% in the first seven trading sessions of July after a decline of 13.5% in the first half of 2024, primarily due to inflationary pressures and reduced ESRD patient volume in China [1] - The company's share price recovery in July is linked to discussions with Carlyle Group regarding the potential sale of its kidney care business, which has been in preparation since last year [1][2] Financial Performance - Year-to-date, Baxter's shares have decreased by 11.4%, contrasting with the industry's growth of 0.8% and the S&P 500 Index's increase of 17.7% during the same period [1] - The kidney care segment, which generates over 30% of Baxter's total business quarterly, is being targeted for divestment, with Carlyle Group expected to offer more than $4 billion for the acquisition [2] Strategic Actions - The potential sale of the kidney care segment, named Vantive post-divestment, is anticipated to reduce Baxter's debt levels and enhance cash resources for capital expenditures [3] - Baxter's strategic plans announced in January 2023 include enhancing operational effectiveness and driving shareholder value, which has already seen the divestment of its BioPharma Solutions business for $4.25 billion [3] Future Outlook - A leaner business model post-separation is expected to improve Baxter's performance, with lower debt levels likely reducing interest expenses and boosting net margins [5] - Factors such as increasing hospital admissions and rising procedural volumes are projected to positively impact Baxter's prospects in 2024, supporting a continued recovery in share price [5]

Core Insights - The article emphasizes the importance of value investing and highlights the use of Zacks Rank and Style Scores to identify strong value stocks [1] Company Analysis: Baxter International (BAX) - Baxter International (BAX) has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential [2] - BAX's current P/E ratio is 11.44, significantly lower than the industry average of 19.94 [2] - The Forward P/E for BAX has fluctuated between 10.64 and 15.91 over the past 52 weeks, with a median of 13.14 [2] - BAX's PEG ratio stands at 1.73, compared to the industry's average PEG of 1.97, indicating favorable growth expectations [2] - The PEG ratio for BAX has ranged from 1.63 to 4.33 in the past year, with a median of 2.26 [2] Company Analysis: Phibro Animal Health (PAHC) - Phibro Animal Health (PAHC) is rated 1 (Strong Buy) with a Value score of A, suggesting it is also a strong value stock [3] - PAHC's forward earnings multiple is 11.81, which is lower than the industry average P/E of 19.94 [3] - The PEG ratio for PAHC is 4.41, significantly higher than the industry average of 1.97 [3] - Over the last 12 months, PAHC's P/E has varied from 8.01 to 15.18, with a median of 10.56 [3] - PAHC's P/B ratio is 2.53, compared to the industry's price-to-book ratio of 6.77, indicating it may be undervalued [4] - The P/B ratio for PAHC has fluctuated between 1.42 and 2.78 over the past year, with a median of 1.89 [4] Conclusion - Both Baxter International and Phibro Animal Health exhibit strong value characteristics, suggesting they may be undervalued in the current market [4]