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Will Baxter International (BAX) Disappoint in Q1 Earnings?


Baxter International Inc. BAX is scheduled to report first-quarter 2017 earnings on Apr 26, before the opening bell.

Baxter International’s track record has been quite impressive, with earnings comfortably beating estimates in each of the trailing four quarters. In the last reported quarter, the company recorded a positive earnings surprise of 9.62%, bringing the four-quarter average to 19.75%. Let’s see how things are shaping up prior to this release.

Factors at Play

For the first quarter of 2017, Baxter expects sales growth in the range of 3% to 4% at cc. Adjusted earnings are forecast in the range of 50 cents to 52 cents per share. Notably, this indicates a rise of 38.9% to 44.4% on a year-over-year basis. We believe that Baxter’s expanding product pipeline is a key growth catalyst. Products like SIGMA SPECTRUM infusion pump and AMIA APD cycler with SHARESOURCE two-way connectivity are expected to drive top-line growth in the quarter.

The Renal business is predicted to be a key growth catalyst. Baxter is focused on expanding its end-stage renal disease (ESRD) product portfolio. An aging population, expanded access in emerging markets and growing adoption of home therapies are its main areas of focus. We also anticipate continued robust performance by IV solutions in the quarter.

Over the past one month, Baxter International returned almost 22.07%, which is higher than the Zacks categorized Medical products sub-industry’s gain of roughly 5.72%.

Baxter International Inc. Price and EPS Surprise

Baxter International Inc. Price and EPS Surprise | Baxter International Inc. Quote

Earnings Whispers

Our quantitative model doesn’t point to an earnings beat this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Baxter International is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 51 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Baxter International carries a Zacks Rank #4 (Sell) which decreases the predictive power of ESP. Also, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Ranks #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are three companies you may want to consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter:

Proteostasis Therapeutics PTI has an Earnings ESP of +5.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks Rank #1 stocks here.

BioCryst Pharmaceuticals, Inc. BCRX has an Earnings ESP of +31.58% and a Zacks Rank #2.

Hill-Rom Holdings, Inc. HRC has an Earnings ESP of +1.27% and a Zacks Rank #2.

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