Chairman, President & Chief Executive Officer at Baxter International
Thank you, Clare, and good morning, everyone. We appreciate you taking the time to join today's call. I will begin with an overview of our first quarter performance and trajectory. Jay will follow with closer look at our financials as well as our outlook for Q2 and the remainder of 2023. After that, we will open up the lines for Q&A.
First quarter sales declined 2% year-over-year on a reported basis and rose 2% at a constant currency, exceeding our original outlook, driven primarily by better than expected sales in Renal Care, Pharmaceuticals and FrontLine Care.
On the bottom line, first quarter adjusted earnings per share of $0.59 also came in above our guidance range of $0.46 to $0.50 per share, again, driven primarily by operational performance in the quarter. Results in the quarter were impacted by expected declines of two of our legacy Baxter businesses. BioPharma Solutions and Acute Therapies, reflecting the tough comparisons to the prior year period due to COVID.
Looking at our legacy Hillrom businesses. Strength in Front Line Care and Global Surgical Solutions was offset by a decline in Patient Support Systems, or PSS performance. This reflects what we believe to be softness in certain hospital capital spending patterns in the current economic environment.
Following what I will candidly describe as a difficult 2022, we begin 2023 with a solid quarter and on a strong footing for future momentum. From a macroeconomic perspective, while the high rates of inflation we absorbed last year continued to impact our performance, most notably in the first half of the year, we are beginning to see more stability in the overall market. We are also starting to see improvements on the supply chain front which includes increased availability of electromechanical components, creating more predictability in our operations in a reduced need for premium cost purchasing.
Specifically, in terms of the healthcare marketplace, admissions and procedural volumes continue to recover from pandemic lows, contributing to positive demand. We also continue to see steady improvements in PD patient growth and many markets following several quarters of lower demand linked to pandemic related mortality issues. In another crucial signal, healthcare staffing levels have stabilized or are rising hospitals and other facilities following some concerning laws. That said, we believe, based on conversations with our U.S. customers, the hospital capital spendings been deprioritized for certain product areas which impacted near-term performance of our PSS business.
Our current expectation is that the situation starts to improve over the course of the year. We're nearing the launch of our next version of our market-leading ICU beds, Progressa+. Progressa+ is the only through ICU bed with new features to help clinical staff address complications and provide the best-in-care possible for patients. We are already seeing strong customer interest in the new solution and look forward to the anticipated launch this quarter.
Lastly, regarding this topic, I will highlight that we are not currently seeing the softness in capital spending extend to our other businesses, such as Infusion Systems or Front Line Care, where demand remains strong for the products. Alongside these trends, we are, of course, moving full speed ahead on the critical strategic initiatives I announced at the outset of the year, focused on enhancing our long-term shareholder value.
Our plan to spin off our Renal Care and Acute Therapies business into a standalone kidney care companies well underway. The standalone company will emerge as a leader in growing market segment with 2022 sales of approximately $4.5 billion and more than one million patients across more than 70 countries. It will hold leading positions across its portfolio and a well-established presence in homes, hospitals and clinics worldwide. Perhaps most importantly, as a standalone entity, it will benefit from increased management focus and the pursuit of its unique investment priorities, better positioned to accelerate growth and innovation, emphasizing its distinct market drivers. We are finalizing our search process to identify the future CEO of our spinoff company and hope to share more information on this front shortly.
We currently expect the spin-off Kidney Care to occur by July 2024 or earlier, and we'll continue to keep you informed of our progress. Last week marked the initial launch phase of the new operating model we previewed for you last quarter, realigning current portfolio of 10 businesses into four vertically integrated global businesses segment. Each segment is being led by an experienced, passionate senior executive with proven track-record of success and compelling visions for the future.
Medical Products and Therapies, led by Group President, Heather Knight, comprises our current Medication Delivery, Advanced Surgery and Clinical Nutrition portfolios. Healthcare Systems and Technologies led by Group President, Reaz Rasul, includes our legacy Hillrom businesses, including Patient Support Systems, Global Surgical Solutions and Front Line Care. Pharmaceuticals, led by Group President, Alok Soni [Phonetic] include our current Pharma portfolio, as well as our BioPharma Solutions business. And finally, Kidney Care comprises our Renal Care and Acute Therapies businesses. Each of these segments has global profit and loss accountability, dedicated commercial operations and fully aligned research and development, manufacturing, supply chain and functional support teams. Note that our global manufacturing sites are being aligned to each business to help fuel greater transparency, foresight and resilience across the supply chain.
While we are in the early stage of this implementation, our teams are moving fast, eager to capitalize on tighter alignments that can help fuel enhanced strategic clarity, agility and innovations. Even as we advance organizational and efficiency efforts, we also know that high-impact innovation is the critical factor to deliver accelerated growth among recent innovation milestones.
We're very pleased to share that we have resubmitted our leading-edge Novum IQ large volume pump for FDA 510(k) clearance. The Novum IQ syringe pump is now in use in United States. As a reminder, we have not included any U.S. sales for the Novum IQ LVP in our guidance. I'm also pleased to report that our newly launched Zosyn premix is experiencing solid uptake in the U.S. hospital pharma marketplace. Other recent launches include Baxter's new patient warming system which minimizes risk-associated with forced air warming, reduces noise and wastes in operating room and lessens the burden on clinician workflows.
Floseal + Recothrom, the first and only active fallible hemostat with a recombinant thrombin, resulting in 1.5x faster preparation ready-connect-system for Baxter's Centrella Smart+ Bed which delivers reliable cable-free connectivity between the hospital bed and most nurse-call systems on the market. And finally, ExactaMix Pro, the next-generation automated nutrition compounder designed to enhance security and improve customer experience and offer stronger data reporting capabilities.
Looking ahead, while macro environmental factors show signs of improvement, we remain cautious and balanced about the pace of recovery. This is why our current transformational initiatives are so vital. Our goal is to redefine our operation for sustained successes in rapidly evolving environment, while always remaining true to our life sustaining missions and focus on medically essential healthcare.
Our momentum today and tomorrow is fueled entirely by our employees. I thank them for their dedication and resilience which are vital to the transformation journey we are taking together.
Now, I will pass it on to Jay for a closer look at our performance and outlook.