Analyst estimates

Baxter International (BAX) plans to announce its 2Q17 earnings results on July 26, 2017. For the last few quarters, the company has exceeded analysts’ earnings estimates. A company’s stock price is usually impacted by the deviation in actual results from analysts’ estimates. 

In 1Q17, Baxter International exceeded analysts’ EPS (earnings per share) estimate of $0.52 as well as the revenue estimate of ~$2.4 billion. BAX stock gained ~4.5% after its earnings results announcement on April 26, 2017.

What to Expect from Baxter International’s 2Q17 Earnings

According to analyst estimates, Baxter International’s 1Q17 earnings per share are expected to be ~$0.57. The company expects to register adjusted EPS of $0.55–$0.57.

In their most recent quarters, Baxter International’s peers Becton Dickinson (BDX), ResMed (RMD), and C.R. Bard (BCR) are expected to report YoY (year-over-year) rises in EPS of 3.9%, 1.4%, and 11.8%, respectively.

Investors can consider the Vanguard S&P 500 ETF (VOO) for exposure to Baxter International to participate in its growth potential. Baxter International accounts for ~0.15% of VOO.

Profit margin estimates

Baxter International is focused on ramping up its R&D (research and development) investments to boost its innovation-led product pipeline and to augment sales. Analysts estimate the company’s R&D expenses to come in at $142 million in 2Q17. 

The company has been undertaking cost-containment initiatives, which have driven its SG&A (selling, general and administrative) expenses down. In 2Q17, analysts estimate SG&A expenses of $601 million, compared to the $698 million in SG&A expenses reported in 1Q17.

For 2Q17, Wall Street analysts project BAX to post a gross profit of ~$1.2 billion. The estimate represents ~44.4% of the company’s total revenues. The company’s gross profit margin in 1Q17 came in at ~44.3% of its total revenues. However, its net profit margins are expected to fall. For more on this topic, please read Baxter Expected to Report Significant Fall in Net Profit Margins.

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