Shares in Baxter (NYSE:BAX) fell slightly this morning after the company topped expectations on Wall Street with its fourth quarter and full-year results.
The Deerfield, Ill.-based company swung to a loss in Q4 thanks to a $322 million hit from the recently-enacted U.S. tax reform legislation. Baxter posted -$71 million in net losses for the quarter on sales of $2.77 billion for the 3 months ended Dec. 31, for sales growth of 5% compared with the same period last year.
Adjusted to exclude 1-time items, earnings per share were 64¢, ahead of consensus on The Street, where analysts were looking for sales of $2.76 billion.
For the full year, Baxter reported a $717 million profit on sales of $10.56 billion, up 4% from 2016.
“Baxter’s solid performance in 2017 reflects the ongoing impact of strategic, disciplined execution,” chairman & CEO Joe Almeida said in prepared remarks. “We are combining an unwavering focus on operational excellence with an increased emphasis on innovation and portfolio expansion to deliver positive results for patients and investors. Looking ahead, our continued transformation will help support our aspiration of delivering industry-leading performance for our investors and other stakeholders in 2018 and beyond.”
The company lost out on $70 million in sales in Q4 thanks to temporary manufacturing disruptions in Puerto Rico after Hurricane Maria devastated the island in September last year. Baxter said that its three Puerto Rico-based facilities are back on the electrical grid and that it’s working closely with the local government and the FDA to stop a shortage of IV fluid.
The company expects to return to pre-hurricane supply levels in the coming weeks, but said it will take a $25 million hit in revenue for the first quarter of 2018.
“I am incredibly proud of and grateful to our employees around the world, who are inspired by our mission to save and sustain lives and have contributed in remarkable ways to our recovery efforts in Puerto Rico,” Almeida added. “I also want to thank our customers for their extraordinary patience and support as we work together through these unprecedented supply challenges, and to acknowledge the FDA’s valued assistance and partnership, which has been vital to the island’s continued recovery.”
Last year, Baxter added at least 50 products to its portfolio with its $625 million buy-out of Claris Lifesciences’ injectable generic drug business.
Sales for the company’s existing business units – surgical care, fluid systems, and integrated pharmacy solutions – grew in 2017 compared to the previous year. Baxter’s surgical care division brought in $1.39 billion, up 5% from 2016, while its Integrated Pharmacy Solutions unit reeled in $2.35 billion, up 5% from the year before.
The company’s fluid systems unit was up 6% from 2016, bringing in $2.43 billion.
Looking ahead to 2018, Baxter said it expects to post adjusted EPS of $2.72 – $2.80 for the full year, ahead of the Street’s estimate of $2.72 per share.
BAX shares were trading at $70.05 apiece in mid-morning trading today, down -2.8%.