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How Baxter International Fared in the Second Quarter


Jul. 27 2018, Updated 8:09 a.m. ET

Top line

Baxter International (BAX) released its Q2 2018 results on July 26. The worldwide sales of the company grew from $2.6 billion in Q2 2017 to $2.8 billion in Q2 2018. During the quarter, Baxter expanded its medication delivery portfolio with two new infusion pumps. Its Spectrum IQ infusion system with Dose IQ safety software received approval in the US and Canada. Baxter’s Evo IQ infusion System secured CE mark approval in the UK and Ireland.

Baxter’s gross profit increased from $1.13 billion in Q2 2017 to $1.24 billion in Q2 2018, and the company’s gross margins expanded from 43.5% in Q2 2017 to 43.6% in Q2 2018.

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Operational performance

Baxter International’s marketing and administrative expenses increased 8% from $630 million in Q2 2017 to $681 million in Q2 2018, and its research and development expenses increased by 12% from $155 million in Q2 2017 to $174 million in Q2 2018. Baxter International reported net income of $343 million in Q2 2018, an increase of 29% over its net income of $265 million in Q2 2017. Its net income per share was $0.63 in Q2 2018 as compared with net income per share of $0.48 in Q2 2017.

Outlook for 2018

For fiscal 2018, Baxter International expects sales growth of 4% to 5% on an operational basis and earnings per share to be in the range of $2.94 to $3.00. In the third quarter, Baxter expects net earnings per share to be in the range of $0.72 to $0.74.

Analysts’ recommendations

In July 2018, analysts’ mean rating for Baxter International is 2.31 with a target price of $79.38. In comparison, Varian Medical Systems (VAR), AstraZeneca (AZN), Medtronic (MDT), and AbbVie (ABBV) have mean ratings of 2.67, 1.83, 2.28, and 2.41, respectively, and a target price of $121.71, $39.09, $94.6, and $113.05, respectively.


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