Following a challenging year that included restoring a hurricane-damaged U.S. plant, Baxter executives said Thursday a new CEO will step into a company positioned for accelerated innovation and profitable growth.
Baxter has been searching for a new permanent CEO since José Almeida abruptly retired earlier this month after nine years leading the medical products maker.
Almeida, who will remain an adviser through Oct. 31, announced his retirement days after Baxter completed the $3.8 billion sale of its Vantive kidney care business to the Carlyle Group, saying it was the “right time” for a new CEO to lead the company into its next chapter.
On Thursday’s fourth-quarter earnings call, Baxter executives sought to reassure investors that a reorganization outlined in January 2023 has now set up the company for success. Baxter also sold its non-core biopharma solutions business for $4.25 billion in 2023 to Warburg Pincus and Advent International.
“These actions have positioned Baxter to accelerate innovation for patients and customers, and to drive profitable growth for our shareholders,” Brent Shafer, interim CEO, said on the call. The next CEO can move the company forward, Shafer added, because “so much heavy lifting has been done over the last few years.”
The restructuring included plans to lay off less than 5% of the workforce, about 3,000 people, in 2023.
The company has paid down $3 billion in debt since the Vantive deal closed, CFO Joel Grade told investors. Baxter took on debt to fund the $10.5 billion acquisition of Hillrom in 2021. The debt repayment allows a shift in capital allocation toward investments to drive organic growth and potential tuck-in acquisition opportunities, Grade added.
Baxter said fourth-quarter and full-year 2024 sales from continuing operations exceeded the company’s forecasts, helped by better-than-expected results in the pharmaceuticals and medical products and therapies segments.
Baxter’s shares jumped 8.5% Thursday to close at $33.44.
“All in all, we see this as a better than expected close to the year for Baxter that should hopefully be followed up by more stability and consistency in 2025,” J.P. Morgan analyst Robbie Marcus wrote in a report to clients, noting the impact from Hurricane Helene on financial performance was less than feared.
Production at Baxter’s North Cove plant in western North Carolina has returned to pre-storm levels after flooding temporarily shuttered the site when the hurricane struck in September, and work continues to restock inventories, the company said. The facility is the country’s largest manufacturer of peritoneal dialysis and intravenous solutions and Baxter’s biggest plant.
For 2025, Baxter forecast sales growth from continuing operations of 5% to 6%. The outlook reflects a “slight impact" from tariffs enacted in China but no impact from those contemplated for Mexico and Canada due to the potential for further delays in implementation and possible exemptions, Grade said.
Baxter is evaluating both internal and external candidates during the CEO search, Shafer said, and moving quickly.
