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Baxter International Inc. is a global medical technology company that provides a wide range of healthcare solutions across more than 100 countries . The company operates through four main segments, offering products and services that include sterile IV solutions, connected care systems, specialty pharmaceuticals, and dialysis therapies . Baxter's diverse product portfolio and international presence enable it to address various healthcare needs worldwide .
- Kidney Care - Provides chronic and acute dialysis therapies, including peritoneal dialysis and hemodialysis .
- Medical Products and Therapies - Offers sterile IV solutions, infusion systems, parenteral nutrition therapies, and surgical hemostat products .
- Healthcare Systems and Technologies - Delivers connected care solutions, smart bed systems, patient monitoring systems, and advanced surgical equipment .
- Pharmaceuticals - Focuses on specialty injectable pharmaceuticals, inhaled anesthesia, and drug compounding .
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Given the operating margin in the third quarter decreased by 90 basis points year-over-year on a comparable basis, can you explain the specific actions you are taking to achieve the significant jump to a 16.5% operating margin next year, and how confident are you in reaching this target?
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With the unprecedented disruption caused by Hurricane Helene at your North Cove facility, how do you plan to mitigate the risk of future supply interruptions, and will you consider spreading out manufacturing among other facilities to reduce this risk?
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Considering the softness in your Healthcare Systems & Technologies segment, particularly the decline in sales related to the U.S. primary care market and international markets like China and France, what specific strategies are you implementing to drive growth and improve performance in this segment?
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As you anticipate resetting your dividend to align with the new size of your organization post the pending sale of the Kidney Care business, can you provide clarity on your dividend policy and whether you are committed to maintaining or adjusting the dividend levels?
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Given the expected loss of TSA income over time and the need to offset stranded costs resulting from the Kidney Care divestiture, can you detail the initiatives you are undertaking to eliminate these stranded costs and ensure operating margin expansion while the TSA income declines?
Recent developments and announcements about BAX.
Corporate Leadership
Board Change
Peter M. Wilver has notified Baxter International Inc. of his resignation from the Board of Directors, effective December 31, 2024. His departure is for personal reasons and not due to any disagreement with the company .
Leadership Change
Peter M. Wilver is leaving the Board of Directors of Baxter International Inc. for personal reasons, effective December 31, 2024. Jeffrey A. Craig will step up as the chairperson of the Audit Committee following Wilver's departure. Craig is a former CEO and President of Meritor, Inc. .
Financial Reporting
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Sales Performance: Baxter's total sales for the third quarter of 2024 amounted to $3.85 billion. Sales from continuing operations were $2.70 billion, marking a 4% increase on both a reported and constant currency basis. This growth was driven by strong performance across all segments, including Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals .
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Earnings Per Share (EPS): The company's U.S. GAAP diluted EPS from continuing operations was $0.12, while the adjusted EPS was $0.49. The adjusted total Baxter diluted EPS was $0.80, which exceeded the company's previously issued guidance .
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Operational Highlights: Baxter has made significant progress in restoring production at its North Cove facility, which was impacted by Hurricane Helene. The facility's highest-throughput IV solutions manufacturing line has been restarted, and new products are expected to begin shipping by the end of November 2024 .
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Strategic Initiatives: The pending sale of Baxter's Kidney Care business to Carlyle is a major milestone in the company's strategic transformation. This transaction is expected to close in late 2024 or early 2025, subject to regulatory approvals .
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Financial Outlook: Due to the impact of Hurricane Helene, Baxter has adjusted its full-year 2024 financial outlook. The company now expects total sales growth of 1% to 2% on a reported basis and approximately 2% on a constant currency basis. Adjusted earnings per share for the full year are projected to be between $2.90 and $2.94 .
Earnings Report
Baxter International Inc. Third-Quarter 2024 Earnings Results
Baxter International Inc. has released its earnings results for the third quarter of 2024, reporting several key financial metrics and operational updates:
These results reflect Baxter's ongoing efforts to navigate operational challenges while pursuing strategic growth initiatives. The company's focus on restoring production capabilities and executing its transformation strategy positions it for continued progress in the coming quarters.
Financial Actions
Dividend Policy
Baxter Announces Dividend Policy Realignment
Baxter International Inc. has announced a realignment of its dividend policy. Starting with the January 2025 dividend payment, the rate will be adjusted to align with the company's new financial profile following the divestiture of its Kidney Care segment. This change is part of Baxter's broader strategic transformation aimed at enhancing operational efficiency and innovation .