Baxter's Q4 sales up 7%, completes foreign-exchange transaction probe

Headline results for the fourth quarter:

Revenue

$3 billion (in line with forecasts)

+7%

Loss

$23 million

Versus profit of $305 million

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

“Our sales and earnings performance in 2019 demonstrate the momentum and underlying strength of our ongoing transformation," remarked CEO José Almeida, noting that "we are driving growth across our global businesses and regions, fuelled by innovation and commercial execution that position us for sustained success."

Additionally, Baxter said it filed its annual report for 2019, which includes audited restated financial statements as of December 31, 2018, and for the full years of 2017 and 2018, along with its quarterly report for the third quarter of 2019. Baxter indicated that it has "now completed its internal investigation into certain intra-company transactions that impacted its previously reported non-operating foreign exchange gains and losses as it relates to the financial statement impacts."

Almeida noted that "our investigation of this matter as it relates to its financial impacts is now complete. The relevant foreign exchange gains and losses were non-operational in nature, and our core operational performance across this period continues to demonstrate the strength and trajectory of our ongoing transformation."

Other results:

  • Renal Care: $960 million,  up 1%, with global growth in peritoneal dialysis therapies, partially offset by lower sales for select US in-centre haemodialysis products
  • Medication Delivery: $775 million, up 18%, driven by the infusion systems and intravenous solutions business, with additional benefit from distributor purchasing ahead of influenza season
  • Advanced Surgery: $231 million, up 8%, boosted by ability to address competitive supply constraints
  • Acute Therapies: $144 million, up 6%, driven by global demand for continuous renal replacement therapy, supported by the continued global rollout of the PrisMax system
  • Sales in the Americas: $1.6 billion, up 9%
  • Sales in Europe, the Middle East and Africa: $789 million, up 3%
  • Sales in Asia Pacific: $618 million, up 7%
  • Full-year revenue: $11.4 billion, up 2%
  • Full-year profit: $1 billion, down 35%

Looking ahead:

Baxter said that uncertainty due to the COVID-19 pandemic is preventing the company from providing guidance for 2020 for the time being, but that it plans to give an update at its first-quarter earnings call on April 30.

Baxter noted that it has experienced "limited financial impact from COVID-19" so far, but "given the rapid and evolving nature of the virus, [we are] not in a position to provide an estimate of any potential negative impact on full-year financial results." Still, the company said it "remains confident in the long-term underlying strength of its portfolio and innovation pipeline."

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