Baxter International Earnings Preview

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Investors are on the edge of their collective seats, hoping that Baxter International (NYS: BAX) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings Thursday. Baxter International is a company that develops and manufactures health-care products for chronic, acute illnesses.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Baxter International, with 12 of 16 rating it a buy and the remainder rating it a hold. Analysts don't like Baxter International as much as competitor Covidien overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared with three months ago.
  • Revenue Forecasts: On average, analysts predict $3.41 billion in revenue this quarter. That would represent a rise of 5.9% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $1.08 per share. Estimates range from $1.05 to $1.11.

What our community says:
CAPS All-Stars are solidly behind the stock with 96% giving it an "outperform" rating. The community at large backs the All-Stars with 95% awarding it a rating of "outperform." Fools have embraced Baxter International and haven't been shy with their opinions lately, logging 209 posts in the past 30 days. Even with a robust four out of five stars, Baxter International's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

51.9%

51.0%

46.3%

51.5%

Operating Margin

23.5%

22.7%

15.0%

24.3%

Net Margin

17.4%

17.4%

12.1%

16.3%

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At the time this article was published

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