Stock Analysis on Net
Stock Analysis on Net

Baxter International Inc. (NYSE:BAX)

This company has been moved to the archive! The financial data has not been updated since August 4, 2016.

Common-Size Income Statement 
Quarterly Data

Baxter International Inc., common-size consolidated income statement (quarterly data)

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3 months ended: Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012 Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sep 30, 2011 Jun 30, 2011 Mar 31, 2011
Net sales 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -62.40 -59.37 -58.82 -58.42 -58.75 -57.59 -50.27 -50.61 -52.60 -50.86 -55.27 -48.44 -47.15 -49.07 -49.24 -47.94 -47.59 -49.41 -50.89 -49.09 -48.11 -49.00
Gross margin 37.60% 40.63% 41.18% 41.58% 41.25% 42.41% 49.73% 49.39% 47.40% 49.14% 44.73% 51.56% 52.85% 50.93% 50.76% 52.06% 52.41% 50.59% 49.11% 50.91% 51.89% 51.00%
Marketing and administrative expenses -27.43 -26.99 -28.16 -31.93 -31.64 -32.63 -24.40 -24.78 -23.78 -23.65 -24.36 -26.07 -22.84 -23.06 -27.71 -21.37 -22.09 -22.20 -24.65 -22.62 -21.63 -21.80
Research and development expenses -7.54 -5.73 -6.19 -5.95 -6.10 -5.95 -7.49 -10.84 -7.75 -8.03 -10.00 -7.68 -7.44 -7.13 -7.75 -8.34 -8.57 -7.94 -7.07 -6.87 -6.76 -6.52
Operating income 2.63% 7.92% 6.84% 3.70% 3.52% 3.83% 17.84% 13.77% 15.86% 17.46% 10.37% 17.81% 22.57% 20.74% 15.29% 22.35% 21.75% 20.45% 17.39% 21.41% 23.50% 22.69%
Net interest expense -0.43 -1.18 -1.23 -1.37 -1.21 -1.25 -0.65 -0.74 -1.01 -1.12 -0.94 -1.19 -0.46 -0.73 -0.59 -0.72 -0.62 -0.53 -0.42 -0.40 -0.42 -0.30
Other income (expense), net 44.91 133.43 2.27 -3.66 2.06 3.58 -3.82 0.93 -0.36 0.62 0.43 1.46 -1.85 0.09 0.59 0.40 1.74 1.68 -1.73 -0.11 -0.37 -0.12
Income (loss) from continuing operations before income taxes 47.12% 140.17% 7.88% -1.33% 4.36% 6.16% 13.37% 13.96% 14.49% 16.97% 9.87% 18.07% 20.25% 20.10% 15.29% 22.03% 22.87% 21.61% 15.25% 20.90% 22.71% 22.26%
Income tax (expense) benefit -0.23 2.44 -0.85 1.41 -1.37 -0.58 -1.65 -3.31 -3.23 -3.79 -2.40 -3.66 -4.17 -4.09 -2.13 -5.26 -4.37 -4.25 -2.11 -4.28 -4.92 -4.69
Income from continuing operations 46.89% 142.61% 7.03% 0.08% 2.99% 5.58% 11.72% 10.65% 11.27% 13.18% 7.46% 14.41% 16.08% 16.01% 13.16% 16.77% 18.51% 17.36% 13.13% 16.61% 17.79% 17.57%
Income (loss) from discontinued operations, net of tax 0.00 -0.29 0.85 -0.04 10.42 12.32 9.59 0.50 1.25 1.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net income 46.89% 142.32% 7.88% 0.04% 13.41% 17.89% 21.31% 11.15% 12.52% 14.45% 7.46% 14.41% 16.08% 16.01% 13.16% 16.77% 18.51% 17.36% 13.13% 16.61% 17.79% 17.57%
Net income attributable to noncontrolling interests 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.25 -0.06 -0.40 -0.21
Net income attributable to Baxter 46.89% 142.32% 7.88% 0.04% 13.41% 17.89% 21.31% 11.15% 12.52% 14.45% 7.46% 14.41% 16.08% 16.01% 13.16% 16.77% 18.51% 17.36% 12.88% 16.56% 17.39% 17.36%

Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).

Cost of Sales and Gross Margin Trends
The cost of sales as a percentage of net sales demonstrates an increasing trend starting from approximately -49% in early 2011 to a peak near -62.4% by mid-2016. This increase signifies a growing burden of direct costs relative to net sales over the observed period. Correspondingly, the gross margin percentage has declined from about 51% in 2011 to approximately 37.6% in the second quarter of 2016, illustrating a contraction in profitability at the gross level possibly due to rising production or procurement costs.
Marketing and Administrative Expenses
Marketing and administrative expenses have generally risen over the analyzed quarters. Initially fluctuating between roughly -21.8% and -24.7% of net sales, these costs escalated significantly around 2015, reaching near -32.63% before slightly reducing but remaining elevated around -27% by mid-2016. The escalation may point to increased spending in support functions or operational overhead, impacting operating expenses.
Research and Development Expenses
Research and development (R&D) expenses as a percentage of net sales exhibited some volatility, generally remaining within a narrow band of approximately -5.7% to -10.8%. There were occasional spikes, notably reaching up to -10% in late 2013 and -10.8% in late 2014, potentially reflecting investment surges in innovation or product development. However, the overall R&D intensity stayed relatively consistent with slight fluctuations.
Operating Income
Operating income margin shows a decreasing trend from a high point of about 23.5% in mid-2011 to a low near 2.63% by the second quarter of 2016. This decline highlights rising costs and expenses relative to revenues, which have adversely affected operating profitability over time. Periods of slight recovery are noted but generally offset by underlying pressures on the cost structure.
Net Interest Expense and Other Income (Expense), Net
Net interest expense increased marginally from approximately -0.3% to around -1.25% during the period, indicating a modest rise in finance costs relative to net sales. Other income (expense), net showed significant fluctuations, including large positive spikes exceeding 100% in early 2016, which are unusual and may reflect one-time gains or extraordinary items affecting the financial results.
Income Before Taxes and Income Tax Expense
Income before taxes followed a pattern similar to operating income, declining overall from above 22% in early 2011 to levels near zero or negative in some quarters, before a notable surge above 140% in the first quarter of 2016, corresponding with the large spikes in other income. Income tax expense has displayed variability without a clear trend, with occasional benefits reducing the effective tax burden in certain periods.
Income from Continuing Operations and Net Income
Income from continuing operations trended downward from around 18% in early 2011 to near zero in late 2015, with a remarkable surge to over 140% in early 2016, paralleling changes in income before tax and other income components. Net income, including effects from discontinued operations starting in 2013, exhibited similar volatility with a significant increase in early 2016, indicating a period of exceptional financial performance.
Discontinued Operations Impact
Discontinued operations began to impact net income notably from 2013 onwards, contributing between about 0.5% and 12.3% in some quarters. This infusion positively influenced total net income, partially offsetting the decline in continuing operations at times and affecting comparative analysis across periods.
Summary of Financial Performance Trends
The data reveals increasing cost pressures impacting gross margin and operating income margins adversely over the analyzed timeframe. Rising marketing, administrative expenses, and R&D costs contributed to this margin compression. Despite generally declining operational profitability, extraordinary items, reflected in other income, and discontinued operations led to episodic spikes in net income in the last quarters observed. This suggests that while core operations faced challenges, non-recurring gains played a significant role in reported profitability in early 2016.