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Baxter International’s 2018 Revenues Expected to See Modest Rise

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Mar. 28 2018, Updated 7:33 a.m. ET

A modest rise in revenues

For fiscal 2017, Baxter International (BAX) reported revenues of ~$10.6 billion, which represents 4.0% YoY growth on a reported basis and a 5.0% rise on an operational basis. The company has projected its annual revenues for 2018 to be 6.0%–7.0% higher year-over-year (or YoY) on a reported basis. This projection indicates a rise of 4.0% YoY on an operational and constant currency basis. 

This guidance figure was derived from the company’s expected growth rate in the end markets. In particular, its Hospital and Renal Care segments guided for growth of 3.0%–4.0%.

Wall Street analysts have projected Baxter’s fiscal 2018 revenues to be ~$11.2 billion, which is a YoY rise of ~6.4%.

Among BAX’s peers, Abbott Laboratories (ABT), Boston Scientific (BSX), and Becton Dickinson (BDX) are expected to earn revenues of about $30.8 billion, $9.7 billion, and $15.8 billion, respectively, for fiscal 2018.

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Growth drivers

Baxter International (BAX) expects to post a benefit of ~250 basis points in its total fiscal 2018 sales owing to favorable foreign currency fluctuations. The company also expects revenues of $145.0 million from the sale of generic injectable pharmaceutical products added to its portfolio through the acquisition of Claris Injectables.

The electricity supply at Baxter’s Puerto Rico facilities has been restored, and the company is striving to increase production at these facilities to pre-hurricane levels. However, the company anticipates residual sales impact of $25 million in 1Q18, attributable to Hurricane Maria.

Baxter International is also projecting cyclophosphamide sales in the US to be close to $95.0 million in 2018, which is almost $100.0 million lower on a YoY basis. The company expects to witness the entry of one or two new generic players for cyclophosphamide in 2018.

In the next article, we’ll discuss the margin prospects for Baxter International.

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