Baxter reports Q3 results; shares down on internal FX probe

Baxter (BAX) Q3 results: Revenues: $2,851M; Renal care: $918M; Medication delivery: $701M; Pharmaceuticals: $527M; Clinical nutrition: $219M; Advanced surgery: $216M; Acute therapies: $130M; Other: $140M.

Operating income: $503M (+16.4%); non-GAAP operating income: $555M.

Q4 Guidance: Sales growth of 3-4% on a reported basis and ~5% on both a constant currency and operational basis; Operating margin: 15.2% – 15.9% on a reported basis and 18.5% – 19% on non-GAAP basis.

The company discloses that it has launched an internal investigation, assisted by external counsel and consultants, into certain intra-Company transactions aimed at foreign exchange gains/losses. The historical exchange rate convention was not GAAP-compliant, enabling the transactions to be undertaken after the exchange rates were known. As a result, previously reported net foreign exchange gains for the years 2014 – 2018 and H1 2019 (range of $8M – 113M) are misstated and should no longer be relied upon.

The company does not expect to file its Q3 10-Q on a timely basis.

Shares are down 6% premarket.

https://seekingalpha.com/news/3509062-baxter-reports-q3-operating-results-shares-6-percent-premarket-internal-investigation-fx