Like a lot of stocks, Baxter International (NYSE:BAX) has taken investors on a roller coaster ride this year. The stock plunged more than 20% in March. However, it was up by a double-digit percentage as of the market close on Wednesday.

Baxter announced its first-quarter results on Thursday before the market open. As part of a recurring pattern this earnings season, the company had good news and bad news. Here are the highlights from Baxter's Q1 update.

Physician smiling with his arms crossed.

Image source: Getty Images.

By the numbers

Baxter announced first-quarter revenue of $2.8 billion, a 6% increase from the $2.6 billion reported in the same quarter of the previous year. This result topped the average analysts' revenue estimate of $2.75 billion.

The company reported net income in the first quarter of $333 million, or $0.64 per share, based on generally accepted accounting principles (GAAP). Baxter's bottom line moved in the wrong direction, though, compared to the GAAP earnings of $342 million, or $0.66 per share, recorded in the prior-year period.

Things looked better on a non-GAAP adjusted basis. Baxter's adjusted net income in the first quarter came in at $0.82 per share, up 9% year over year. This result easily beat the consensus analysts' estimate of Q1 adjusted earnings of $0.72 per share.

Behind the numbers

Baxter's revenue growth in the first quarter stemmed in part from the novel coronavirus outbreak. CEO Jose (Joe) Almeida said that the company experienced increased demand in Q1 for several products due to the COVID-19 pandemic, especially in the latter part of the quarter. These products enjoying higher demand included the company's continuous renal replacement therapy (CRRT) line, its intravenous solutions, and some generic injectables and parenteral nutrition therapies.

The company saw stronger sales growth in the U.S. market. Revenue in the U.S. jumped by 9% year over year to $1.2 billion. Baxter reported international revenue of $1.6 billion, a 4% year-over-year increase. All six of the company's global business units posted sales growth in the first quarter.

Although revenue grew at a solid clip, Baxter's expenses rose even higher, causing its year-over-year GAAP earnings decline. The greatest impact was with the company's research and development expenses, which climbed 13% year over year to $146 million.

Looking ahead

Like several other companies in the healthcare sector, Baxter didn't provide Q2 or full-year 2020 guidance due to the uncertainty created by the COVID-19 pandemic. However, the company appears to be in good shape to weather the storm.

Baxter strengthened its balance sheet in Q1 by issuing $1.25 billion of long-term debt. And instead of cutting back staff, the company is recruiting for up to 2,000 additional permanent and temporary workers to help ramp up production due to increased demand for some products during the virus outbreak.

One key product that could boost Baxter's sales in the coming months is its Oxiris filter set. It's the only filter set available in the U.S. that reduces pro-inflammatory cytokine levels in blood. Oxiris is used with patients diagnosed with COVID-19 who either have or are at serious risk of respiratory failure and require blood purification. Although the filter set hasn't been approved by the FDA yet, the agency granted emergency use authorization (EUA) that allows Baxter to sell the products during the COVID-19 pandemic.