Baxter International Guides Q1, FY23 Adj. EPS Well Below Estimates; To Cut 5% Jobs - Update

(RTTNews) - While reporting financial results for the fourth quarter on Thursday, health care company Baxter International Inc. (BAX) initiated earnings, adjusted earnings and sales growth guidance for the first quarter and for the full-year 2023. The company said the guidance for 2023 reflects a challenging first half of the year due to increased cost of sales resulting from elevated costs of inventory produced in the second half of 2022, reflecting the significant inflationary pressures the company experienced, that will impact earnings when the related inventory is sold in 2023. Baxter expects the impact from these inflationary pressures on its earnings to begin to ease in the second half of the year.

For fiscal 2023, the company now projects earnings in a range of $1.43 to $1.63 per share and adjusted earnings in a range of $2.75 to $2.95 per share on sales growth of 1 to 2 percent on a reported basis and flat to 1 percent on a constant currency basis.

On average, 16 analysts polled by Thomson Reuters expect the company to report earnings of $3.56 per share on sales growth of 1.4 percent to $15.20 billion for the year. Analysts' estimates typically exclude special items.

For the first quarter, the company anticipates earnings in a range of $0.14 to $0.18 per share and adjusted earnings in a range of $0.46 to $0.50 per share on a sales decline of about 3 percent on a reported basis and 1 percent on a constant currency basis.

The Street is looking for earnings of 0.76 per share on a revenue decline of 2.50 percent to $3.61 billion for the quarter.

The company noted that the new operating model design process, which was announced in early January, is expected to be completed by early second quarter, with an updated reporting framework expected to be implemented during the second half of 2023.

In response to the significant macroeconomic challenges Baxter has experienced over the last two years, the company is also in the process of executing a cost reduction program in parallel with its operating model redesign that is expected to be finalized later this quarter.

This initiative and additional actions the company has undertaken to enhance performance are expected to deliver more than $300 million in total savings during 2023. These actions are currently expected to result in a global workforce reduction of less than 5%.

For more earnings news, earnings calendar, and earnings for stocks, visit rttnews.com