What happened
Healthcare tech company Baxter International's (BAX -0.39%) stock lost over 12% of its value this week, according to data from S&P Global Market Intelligence. That wasn't particularly a surprise, as it reported a set of earnings and proffered guidance that didn't meet expectations.
So what
Before market hours on Thursday, Baxter published its fourth-quarter and full-year 2022 figures. These showed that quarterly sales were $3.9 billion, 11% higher on a year-over-year basis. Going in completely the opposite direction was the bottom line, which declined to $444 million ($0.88 per share), according to non-GAAP (adjusted) standards from the year-ago income of $521 million.
This represented a mixed quarter for Baxter, as it topped the average analyst estimate for sales (of just under $3.8 billion) but was under that for adjusted, per-share net profit ($0.94).
Like many other companies that have fallen short of expectations this earnings season, Baxter was quick to point the finger at external challenges.
It quoted its CEO Jose Almeida as saying, "Ongoing macroeconomic challenges and supply chain headwinds continue to weigh on business performance, underscoring the need for decisive action to create value for the patients, shareholders and other stakeholder communities that rely on us."
Now what
That bottom-line number wasn't the only source of investor disappointment. Baxter's guidance for full-year 2023 calls for sales growth of 1% to 2%, while the company believes it will net an adjusted profit of $2.75 to $2.95 per share. The latter range is quite some distance down from the average analyst estimate of $3.56 for the year.
With that kind of discrepancy, several analysts were quick to lower their price targets on the stock. Deutsche Bank's Pito Chickering took a chop to his, slicing it to $40 per share from the previous $51. Among several others, Wells Fargo's Larry Biegelsen also made a reduction -- his new level is $43; formerly he had pegged the stock as being worth $52.
